Nvidia (NASDAQ: NVDA) shares have soared 1,800% over the past five years, riding on the company’s supremacy in the artificial intelligence (AI) chip market. This meteoric rise has translated into staggering gains in earnings, with revenue and net income surging by triple digits and hitting all-time highs in the latest quarter.
However, a pertinent question arises – will this fervent demand for AI tools, spanning from Nvidia’s chips to its software and platforms, endure? Nvidia finds itself increasingly reliant on demand from firms investing in AI and seeking the necessary capacity for AI initiatives, with data center revenue constituting over 80% of total revenue in the last quarter. One particular statistic sheds light on this dilemma.
The Evolution of AI Discourse
Not too long ago, most companies refrained from discussing AI during their earnings calls, pivotal moments to elaborate on significant projects and future prospects. This narrative has undergone a significant shift, as per data compiled by Statista.
The data reveals that among companies listed in the Russell 3000 index, over 16% referenced AI during earnings calls last year, a substantial increase from under 10% the previous year. Astonishingly, this figure skyrocketed from less than 1% in 2015.
Data source: Statista.
This surge in AI mentions signifies a promising trend, with continual growth in these references implying untapped potential. An escalation in the number of companies discussing AI hints at more entities embarking on AI projects, potentially turning to industry leader Nvidia for support.
All signs point towards sustained revenue growth for Nvidia, promising further improvements in share performance. For investors, the message is clear – the time is ripe to explore opportunities in shares of this AI chip juggernaut. Whether the trajectory of Nvidia’s stock continues its ascent or takes a momentary pause, its position appears secure for long-term growth alongside the escalating demand for AI products and services.
Is Nvidia a Sound Investment Right Now?
Prior to investing in Nvidia, take a moment to ponder:
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Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.