It's no surprise that Nvidia ( NVDA ) is one of the stocks most widely held by worldwide investors right now. The company has been a dominant force in the graphics processing market for years, and the company continues to carve out new growth opportunities.
Four high-profile fund managers added to their positions last quarter, including Israel Englander's Millennium Management, Philippe Laffont's Coatue Management, Ken Griffin's Citadel Advisors, and John Overdeck and David Siegel's Two Sigma Investments. These billionaires respectively bought around 2.81 million shares, more than 854,000 shares, over 788,000 shares, and nearly 765,000 shares.
The answer to "Why Nvidia?" is pretty straightforward: Virtually every aspect of its business is growing faster than anyone had expected -- including Nvidia's management team. Gaming sales jumped 37% in the fourth quarter, with data center revenue up an even more impressive 71%.
Take artificial intelligence (AI), for example. While selling its graphics processors for use in the gaming industry is still the company's top revenue generator, AI has quickly become a key source of sales for Nvidia as well. In the fourth quarter of fiscal 2022, data center revenue (which includes chip sales for use in AI), surged more than 71% year over year and accounted for nearly 43% of the company's total sales. That's great news for Nvidia and its investors because AI chips are expected to grow into a $71 billion market by 2026.
But AI is hardly the only exciting thing about owning Nvidia stock$英伟达(NVDA)$. The company is also immensely profitable, with $9.8 billion in net income in fiscal 2022, more than double its 2021 net income.
Buying shares of Nvidia is basically making a bet on the growth of data, just as buying Intel in the 1990s was a bet on the growth of consumer PC sales. Chipzilla has made early investors a lot of money as it became the dominant supplier of CPUs. Nvidia is following a similar course in the graphics processing unit (GPU) market as it controls more than 80% of the market for AI processors used in the cloud and data centers, according to a 2021 report from Omdia.
Nvidia has solidified its lead with recent partnerships. It recently announced that Facebook parent Meta Platforms will deploy 6,000 A100 GPUs in its new AI supercomputer. Meta is expected to expand its usage to 16,000 chips later this year.
Block $Block(SQ)$is using Nvidia GPUs to power its conversational AI for Square Assistant. Meanwhile, social-media leader Snap $Snap Inc(SNAP)$is using the company's chips to power its recommendation software. Strong demand from leading tech firms is ultimately powering explosive growth on Nvidia's bottom line.
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