yet, Nvidia‘s (Nasdaq: NVDA) Business has been thriving for so long that it has become boring. As of the time of writing, shares are down about 3% despite better-than-expected third-quarter earnings and a booming market for artificial intelligence (AI) devices.
But how long can the momentum last? Let’s dive deeper into what could happen in the next three years She has in place.
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Despite being the world’s largest company with a market cap of $3.6 trillion, Nvidia’s business is still growing like a startup. Third-quarter revenue rose 94% year over year to $35.1 billion, beating analysts’ expectations of $33.2 billion. The momentum was driven by its data center business, where it sells advanced products Graphics processing units (Graphics Processing Units) to run and track artificial intelligence algorithms.
Nvidia also has tremendous pricing power, with a gross margin of about 75%, which suggests that He saved Competition in the Gulf. Management plans to sustain growth through new product releases, such as Blackwell-based AI chips, which are expected to provide significant performance improvements over previous generation GPUs.
However, while the results have been impressive, investors should note that Nvidia’s growth is slowing. During the previous three quarters, sales increased by 122%, 262% and 265%, respectively. This slowdown is likely to continue as the company faces more difficult comps over the next three years.
Analysts remain optimistic about the future of the AI industry, with Bain & Co. forecasting it will generate revenues of $990 billion by 2027 — compared to just $185 billion last year. They believe that as companies move out of the pilot phase to begin scaling AI technology into their operations, huge demand could strain supply chains and cause shortages. If this happens, Nvidia actually Huge margins may rise.
However, analysts made similar predictions during the dot-com bubble in the early 2000s. While the Internet turned out to be a world-changing success, its widespread adoption did not come as quickly as expected. There are growing signs that something similar could happen to artificial intelligence.
according to The EconomistHowever, the disparity between investor enthusiasm about AI and reality may be untenable. They reported that only 5% of US companies say they use AI in their products and services, and that few AI startups are profitable. It is worth noting that OpenAI, the creator of ChatGPT, expects to lose about $5 billion this year due to huge inflows of employee salaries and huge energy costs associated with operation. Large linguistic models (Master of Laws).
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