July 20, 2024

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Nvidia Investors Just Got Some Bullish News

2 min read

There has been almost nothing but good news from Nvidia (NASDAQ: NVDA) over the past four quarters. Many investors might not recall that Nvidia’s revenue actually declined 13% year over year in the first quarter of its fiscal 2024 (which ended April 30, 2023).

Fast-forward to fiscal 2025’s first quarter, when revenue exploded higher by more than 260% year over year. In conjunction with that growth, the stock price has more than tripled in the past year, and investors continue to receive positive signs that the business will keep growing. The latest bullish news should have investors thinking Nvidia still has a long runway to increase sales in its data center segment.

AI spending soars

After such a huge jump in sales over the past year, some investors may be wondering if Nvidia’s revenue growth may have peaked. But recent news from its fellow tech company Broadcom suggests that the addressable market for artificial intelligence (AI) equipment is broad and still growing.

Broadcom supplies semiconductor solutions and infrastructure that AI requires. Its products include switching solutions, accelerators, server storage equipment, and on-site and cloud connectivity offerings.

Like Nvidia, Broadcom recently reported strong results for its latest quarter. Revenue from its AI-related products set a record, and made up a quarter of total sales as the top line increased by more than 40% year over year. But it’s something Broadcom CEO Hock Tan said during management’s conference call with investors that should make Nvidia investors more bullish.

Tan admitted that Broadcom wasn’t going to try to compete with Nvidia in its leading position as a supplier of graphics processing units (GPUs) to provide AI systems with computing power. He acknowledged, however, that Nvidia was increasingly becoming a competitor to Broadcom on the networking side. Nvidia’s next-generation Blackwell platform is just the first step. Speaking of Nvidia, Tan noted, “They are trying to create a platform…

2024-06-19 09:43:00

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