AI has become the hottest investing topic, attracting both new and experienced investors. Multiple research firms predict the AI market to be valued over $1 trillion by 2030, so this is not surprising.
Because AI could yield windfall returns, investor interest in AI equities is at an all-time high. Nvidia (NASDAQ: NVDA) and Marvell Technology (NASDAQ: MRVL) are good AI-focused stocks. This is why these stocks are good currently.
1. Nvidia Nvidia, the poster child of the AI revolution, is creating history.
In the fourth quarter of fiscal 2024 (ending Jan. 28, 2024), Nvidia exceeded consensus projections for revenue and profitability. Since the U.S. government's tightening chip exports to China may compel Nvidia to cancel billions of dollars in chip orders in 2024, this is impressive. In addition to AMD and Intel, Nvidia faces competition from its main clients who are creating their own AI chips.
However, Nvidia's AI processors' technological advantage has given it nearly 92% of the worldwide data center GPU market. Data centers transitioning their trillion-dollar installed bases from general-purpose computing to accelerated computing are using the company's state-of-the-art GPUs (A100 and H100 chips) and advanced networking technologies,
including InfiniBand solutions for high-performance AI infrastructures and Spectrum-X end-to-end ethernet-based solutions for AI-optimized networking. Nvidia's AI-optimized technology may also benefit from corporations across industries using generative AI technologies across use cases, which may be worth trillions.
Demand for Nvidia's chips exceeds supply, giving the company tremendous pricing leverage and fueling its strong data center sales in recent quarters.
Along with hardware, Nvidia's CUDA programming software stack helps clients optimize GPU programming for accelerated computing applications. Enterprises require help maintaining complicated software infrastructure as fast computing grows. Since the organizations have small engineering teams, Nvidia sees a big opportunity for its Nvidia AI Enterprise cloud-native software platform.
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