July 21, 2024

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Why Nvidia Is a Must-Have in Your Tech Portfolio

2 min read

Artificial intelligence (AI) stocks have been powering market gains in recent times thanks to the technology’s future potential. By using AI, companies can become more efficient, develop better products faster, and more — and this could result in soaring earnings down the road.

That’s why companies are now investing in AI platforms, and this trend has helped earnings climb today for makers of the tools necessary for AI to function. These particular players don’t have to wait for AI to boost revenue and profit, and one in particular stands out right now.

I’m talking about chip designer Nvidia (NASDAQ: NVDA). The company’s graphics processing units (GPUs) power some of the most crucial AI tasks, like training and inferencing large language models, so that these models can then go on to do their job of solving complex problems.

If you want to set yourself up for an AI win, you should invest in a variety of stocks, from those using AI to improve their businesses to those selling AI tools. And to maximize your returns in this AI boom, you’ll want to include Nvidia in the mix. Here’s why this top stock is a must-have in your tech portfolio.

A human profile is shown against a backdrop of code.

Image source: Getty Images.

Nvidia’s broadened revenue opportunity

First, a quick summary of Nvidia’s path so far. Several years ago, Nvidia’s GPUs mainly served the video games industry. However, as it became obvious that the GPU’s speed could serve many other industries, Nvidia’s revenue opportunity broadened. Fast forward to a few years ago, when AI began to emerge as the next high-growth technology area. Here, it was clear that the GPU’s ability to handle many tasks simultaneously made it perfect for those developing AI platforms.

Nvidia focused its attention there not only on selling GPUs but also on offering related products and services, such as enterprise software. Nvidia is now an AI powerhouse, generating more than $47 billion from this business last year — compared to about $10 billion from the video games industry.

In recent…

2024-06-23 05:50:00

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