Nvidia: Soaring High in the AI Skies
When it comes to the bustling world of artificial intelligence, Nvidia (NASDAQ: NVDA) stands out like a beacon in a storm. The company’s graphic processing units (GPUs) have become the bedrock of the AI revolution, with its latest Blackwell chips witnessing a surge in demand that can only be described as “insane.”
Nvidia’s stronghold in the GPU space, boasting an over 80% market share, is not just due to robust hardware performance. It’s the company’s CUDA software platform that set the stage long before AI became the talk of the town. As AI intensifies, the need for advanced AI models requires significant computing power for training, power that Nvidia’s GPUs can deliver effortlessly.
Major tech giants funneling hefty investments into AI infrastructure, such as Alphabet and Oracle, paint a lucrative future for Nvidia. The insatiable demand for AI solutions propels Nvidia’s growth trajectory, making it a key player in the evolving AI landscape.
Despite its stellar performance, Nvidia still trades at an attractive price point, with a forward price-to-earnings ratio (P/E) under 35 and a price/earnings-to-growth ratio (PEG) hovering around 0.9 – a bargain by growth stock standards.
Image source: Getty Images.
Microsoft: Harnessing AI for Growth
Another frontrunner riding the AI wave is Microsoft (NASDAQ: MSFT), which early on seized the opportunity by making significant investments and forging alliances, notably with OpenAI.
Azure, Microsoft’s cloud computing arm, emerged as a primary AI beneficiary, with organizations flocking to its platform for crafting bespoke AI solutions. The pay-as-you-go model of Azure has witnessed robust usage, fueling consistent revenue growth of around 29% to 30% in recent quarters.
Beyond cloud computing, Microsoft’s GitHub Developer platform has reaped AI rewards through its AI assistant, Copilot, catering to developers’ coding needs with intuitive suggestions and task completions.
Microsoft has upped the ante by introducing enhancements to its Microsoft 365 Copilot, enticing users with novel features like nativelanguage programming in Excel and seamless presentation creation in PowerPoint through Copilot. The $30 per user per month add-on presents a substantial growth avenue for Microsoft, leveraging its innovative edge in the AI domain.