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NVIDIA controls 70% to 95% of the AI chip market, making it almost monopoly for feeding data centers for artificial intelligence.
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The company believes that the expenditure for data centers can reach an estimated $ 4 trillion by 2030.
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NVIDIA sees AI and robotics as a combined “Multitrillion-Dollar Opportunities”, which form the scene for long-term growth.
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10 shares that we like more than Nvidia ›
Artificial Intelligence Investments feed a historic tree in technology, which increases both income and stock prices to astronomical level. In recent years, hundreds of billions of dollars have been deposited in AI infrastructure-in particular semiconductors and data center-to-have the demand for chatbots and AI-driven software has risen.
This trend only speeds up. The demand for AI processor is ready to expand dramatically, whereby the expenditure for data centers is expected to reach $ 4 trillion between now and 2030.
Amid this wave of investment, Nvidia (Nasdaq: NVDA) Has emerged as the dominant power. The share price has risen by more than 1,200% in the last five years – and it still has the potential to be the largest AI winner of the market in 2030. This is why.
Skepticism is of course after such enormous storage wines, but the basis of Nvidia in AI remains unparalleled. The company is the clear leader in feeding data centers for artificial intelligence, with a market share of 70% and 95% in AI and half guides. This dominant position will not be easily eroded and gives Nvidia a huge advantage as the AI question continues to grow.
Another reason why it is difficult to challenge Nvidia’s lead is the software ecosystem. The Cuda platform of the company (first introduced in 2006) has become the backbone for AI development. Thousands of machine learning and deep learning applications are optimized for CUDA, making it difficult for customers to switch to competing hardware. This software-lock-in strengthens the competitive position of Nvidia and gives it a longer runway than just hardware dominance suggesting.
This combination of hardware and software – Dominance positions Nvidia to catch a huge wave of expenditure. NVIDIA CFO Colette Kress estimates that companies will invest $ 3 trillion up to $ 4 trillion in building and upgrading data centers by the end of the decade. As she put it: “We are at the start of an industrial revolution that will transform every industry.”
Some analysts believe that these expenditures can increase Nvidia’s financial data. Tech analyst Beth Kindig of I/O Fonds projects NVIDIA’s data center income by the end of next year $ 75 billion per quarter, and no less than $ 500 billion a year by 2028 – an increase of 335% compared to Fiscal 2024.
And while AI data centers stimulate the current growth of Nvidia, it has many opportunities in the pipeline. Nvidia CEO Jensen Huang recently played the stage for the future of Nvidia when he said: “We work towards a day where billions of robots, hundreds of millions of autonomous vehicles and hundreds of thousands of robot factories can be driven that can be driven by Nvidia technology.”
Huang described robotics (including autonomous vehicles) and AI as a “multitrillion dollar growth option”, alongside data centers. If even a fraction of that vision comes to flourish, this can be an important catalyst for Nvidia outside today’s remarkable growth trajectory.
Of course there is no prediction without risks. The biggest challenge in the short term is not competition, but the wider economy.
The last job report from the Bureau of Labor Statistics showed that the US added only 22,000 jobs in August, far below the estimates. The weak data, in combination with downward revisions from July, led to a withdrawal into the shares of Nvidia, which shoved around 6% in recent weeks.
If the economy further slows – especially if unemployment is far above the current 4.3% – the AI expenditure of companies can pause, which means that Nvidia’s turnover is under pressure in the short term.
Yet history suggests that decline is temporary. The average American recession since the Second World War lasted only 11.1 months and the shares often come back before the economy fully recovers.
Apart from the short turbulence, the AI story remains intact in the long term. With a dominant share of AI and half -guides and software, exposure to trillion dollars to data center investments and a powerful runway in robotics, Nvidia is uniquely positioned to lead the AI era and one of the largest market winners in 2030.
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Chris Neiger has no position in one of the aforementioned shares. The Motley Fool has positions and recommends Nvidia. The Motley Fool has a disclosure policy.
Prediction: These Artificial Intelligence (AI) shares will be the biggest winner of the market in 2030, was originally published by The Motley Fool
