In the past two days, Nvidia CEO at this year's International Consumer Electronics Show At CES, he unveiled his most ambitious blueprint to date, but Wall Street is increasingly divided on whether Nvidia 's rapid growth has reached its limit or is simply entering a new phase of development.
In an interview, Dan Ives, managing director and renowned technology analyst at Wedbush Securities, stated, "If you leave there thinking it's just artificial intelligence... " If it's a bubble, then you've had a bit too much to drink in Las Vegas. The reality is... we're talking about trillions of dollars invested.”
Shortly before making these remarks, Jensen Huang announced at CES Nvidia 's highly anticipated next-generation Rubin data center. The product (consisting of six independent chips working together) is set to be available this year, according to Microsoft. Other large cloud computing The provider will be among the first customers to deploy the new hardware in the second half of the year. He also heavily promoted two of Nvidia's latest technological advancements—humanoid robots. Technology and a brand new series of autonomous vehicle models called Alpamayo.
Despite this, Wall Street analysts remain divided on Nvidia's future. Ives is undoubtedly a staunch optimist in the tech sector, predicting Nvidia's market capitalization will climb to $6 trillion, but Gil Luria, head of technology research at DA Davidson, offers a more sober perspective. He points out that this skepticism stems from "cyclical" fluctuations.
For the past two years, Nvidia's stock price has been driven almost entirely by strong demand for its AI GPUs. Luria says the market has begun to price in expectations of a demand slowdown and is questioning whether the next wave of demand can quickly fill the gap.
He stated, "The reason Nvidia's prices are so low is that market pricing actually only considers the data center market, which is about to peak." Luria believes that Huang has already begun to look at the "next step"—applying GPUs to robotics and automobiles. However, he also pointed out that "timing" remains the ultimate key issue.
Intense competition
Meanwhile, competitors were not sitting idly by. The day after Jensen Huang's keynote address, AMD CEO Lisa Su introduced the concept of "YottaFLOPS"—a unit for measuring computing power.
Lisa Su predicts that the artificial intelligence industry will grow to have more than 5 billion users per day within five years. The current unit of computing power is YottaFLOPS, which is 10 to the power of 24 operations per second. She hopes that computing power can be increased to over 10 YottaFLOPS in the next five years.
Ives stated that while Nvidia remains the gold standard in the field of artificial intelligence, the market underestimates AMD's potential to lead the "next phase" of this revolution.
“It will become a key player in the next phase of the artificial intelligence revolution,” he added. “I don’t think that’s reflected in AMD’s stock price yet.”
Other shocks
However, it's important to note that the most crucial aspect of this conflict on Wall Street isn't the giants themselves, but rather the underlying infrastructure that supports them. Luria recently gave CoreWeave a "reluctant upgrade," but made it clear that his pessimism about CoreWeave hasn't dissipated.
He believes CoreWeave and Oracle Companies like Oracle are described as "mediocre," and they are accused of borrowing money to build "speculative capabilities" while "damaging" shareholder value.
“We continue to stay away from them,” he said.
Furthermore, the main catalysts driving the continued growth of artificial intelligence may come from outside Nvidia.
Luria points out that OpenAI reportedly plans to raise $100 billion in equity funding by the end of March, with a valuation reaching a staggering $750 billion to $830 billion.
If OpenAI achieves this goal, then "the euphoria will reach its climax," with all major players doubling down on AI infrastructure. However, Luria remains cautious, believing OpenAI's funding targets "may be a bit too ambitious." And if the funding environment cools, the large orders for Nvidia's Rubin chips may be jeopardized.
(Article source: CLS)
