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Sunday, September 24, 2023

Nvidia shares soar on leading AI charge

Cleo Capital Managing Director Sarah Kunst provides insight on key stocks to look at on Making Money.

Nvidia has emerged as one of the leaders of the tech companies racing to incorporate advanced artificial intelligence (AI) tools into their products, and the company’s stock has surged amid growth in demand with a 20% plus gain on Thursday alone. 

While there are no "pure play" AI stocks, as all the publicly-traded companies heavily involved in AI have other business offerings, Nvidia has come to be considered one of the leaders in the field despite being in a similar position. 

Ticker Security Last Change Change %
NVDA NVIDIA CORP. 381.61 +76.23 +24.96%

Nvidia stock has soared by 113% year-to-date as of Wednesday’s close – outpacing some of the biggest names in tech and AI including Google and Microsoft which have enjoyed 30% growth in their share prices in the same period. After the market closed Wednesday and Nvidia held its earning call, its share price surged as much as 28% in after-hours trading to extend its lead as the world’s most valuable chipmaker and the fifth most valuable company on Wall Street.

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"Generative AI is driving exponential growth in compute requirements and a fast transition to Nvidia accelerated computing, which is the most versatile, most energy efficient and the lowest [total cost of ownership] approach to train and deploy AI," said Colette Kress, Nvidia chief financial officer and executive vice president. "Generative AI drove significant upside in demand for our products, creating opportunities and broad-based global growth across all markets."



Nvidia has emerged as a major player in the tech sector’s push to deploy AI solutions. (Photo by Justin Sullivan/Getty Images / Getty Images)

Nvidia is deeply involved in AI in a number of areas, as it produces semiconductors, high-end graphics processing units (GPUs) and application programming interfaces (APIs) used in supercomputers and machine learning applications. Both GPUs and APIs are used in the process of training machine-learning models, and require sophisticated semiconductors, or computer chips, to generate the computing power needed to carry out the task of processing vast quantities of data.

Kress explained that several prominent tech companies with cloud data storage offerings – including Google Cloud, Oracle Cloud and Microsoft Azure – are seeing "strong demand" from "generative AI pioneers" and deploying Nvidia’s tools to satisfy it.

"Enterprise demand for AI and accelerated computing is strong. We are seeing momentum in verticals such as automotive, financial services and telecom where AI and accelerated computing are quickly becoming integral to customers’ innovation roadmaps and competitive positioning," Kress said.


Nvidia headquarters

Nvidia’s stock prices surged to record highs after a blockbuster earnings report. (REUTERS/Robert Galbraith / Reuters)

Nvidia AI Enterprise has more than 100 frameworks, pretrained models and development tools that are focused on various tasks, such as speeding up data science tasks and AI model development.

She went on to say that Bloomberg is using Nvidia tools for a 50 billion parameter model, while AT&T is "working with us on AI to improve fleet dispatches so their field technicians can better serve customers."

Ticker Security Last Change Change %
MSFT MICROSOFT CORP. 313.85 -1.41 -0.45%
GOOGL ALPHABET INC. 120.90 -1.66 -1.35%
ORCL ORACLE CORP. 98.32 -0.22 -0.22%


Nvidia has a partnership with Microsoft in which it will integrate enterprise-ready AI software into Microsoft’s Azure Machine Learning platform to help Azure customers rapidly build and deploy custom applications. 

"Our collaboration with Microsoft transformed Windows into the ideal platform for creators and designers harnessing generative AI to elevate their creativity and productivity," Kress noted.

Reuters contributed to this report.

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