Any conversation about artificial intelligence (AI) would, of necessity, include Nvidia (NVDA 6.18%). The company pioneered the graphics processing units (GPUs) that underpin many of the world's most advanced AI models and continues to innovate at a breakneck pace.
At the company's GPU Technology Conference (GTC), which kicked off on Sunday in San Jose, California, Nvidia unveiled several startling developments on Monday that suggest the AI revolution is only just beginning. What came out of the conference bolsters the argument for investing in this company. Here are three reasons to buy Nvidia stock like there is no tomorrow.
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1. Nvidia unveiled the next "must-have" AI processor
When ChatGPT burst on the scene in late 2022, the race to adopt generative AI was on. The potential to leverage these next-generation AI models to boost productivity had businesses scrambling to figure out how best to profit from these developments in AI. The processor that enabled these advances was Nvidia's H100 Tensor Core GPU, which could train large language models (LLMs) up to 30 times faster than its previous generation of AI chips. Now, those processors are so last year.
On Monday, Nvidia unveiled the Blackwell platform "to power a new era of computing." The Blackwell B200 Tensor Core GPU is the "world's most powerful chip" for AI, according to CEO Jensen Huang. The processor is packed with 208 billion transistors (up from 80 billion in the H100), delivering five times the performance. The architecture combines two tightly integrated GPUs that act in concert with each other. The Blackwell GPU can scale up to 10 trillion parameters. For context, GPT-3, the LLM behind ChatGPT, had just 175 billion parameters.
Furthermore, the GB200 Grace Blackwell Superchip combines two B200 chips, a Grace CPU, and an NVLink high-speed interconnect, which makes all the parts act in concert. The AI-centric processor offers up to 30 times the performance of its predecessor while reducing energy consumption by up to 25 times.
2. Cloud providers are lining up to buy Nvidia products
Much like Nvidia's previous AI-centric processors, the largest cloud infrastructure providers are lining up to deliver its latest offerings via the cloud.
Amazon Web Services (AWS) announced it will offer the GB200 Grace Blackwell Superchip, which AWS CEO Adam Selipsky said, "marks a significant step forward in generative AI and GPU computing."
It was also revealed that Microsoft would be "one of the first organizations to bring the power of Nvidia Grace Blackwell GB200" to its Azure Cloud. The company said that Nvidia processors would provide AI predictions to Microsoft Copilot, its generative AI-powered digital assistant. Not to be left out, Alphabet said that the company would adopt the Blackwell platform, with "Grace Blackwell-powered DGX Cloud coming to Google Cloud."
This was just the tip of the iceberg, as Nvidia announced collaborations with several of the biggest names in technology, including Oracle, Dell Technologies, and Meta Platforms, among many others.
3. It's not just about the hardware for Nvidia
Nvidia made a name for itself by creating the processors that power AI, but it isn't stopping there.
The company introduced Nvidia Inference Manager (NIM), a groundbreaking software platform that helps developers streamline the creation and deployment of AI systems. Nvidia will provide pre-built and optimized AI models that businesses can adapt using their first-party data. This way, companies don't need to reinvent the wheel, significantly reducing the amount of time needed to deploy AI. These tools will help smaller companies that don't have the resources of the aforementioned tech giants to adopt and implement AI.
This helps illustrate Nvidia's strategy, which increasingly involves full hardware and software packages to help businesses succeed.
Is Nvidia stock a buy?
Even with a seemingly insurmountable lead in the space, Nvidia continues to innovate at a breakneck pace and take AI processing to the next level. This is evident from the company's performance and its soaring stock price, which has surged more than 500% since the beginning of 2023, which marked the advent of generative AI.
Despite those gains, there are many who believe -- myself included -- that this is just the beginning and that the accelerating adoption of AI will continue to bolster the fortunes of Nvidia and its shareholders.
Furthermore, at just 36 times next year's earnings, Nvidia stock is a steal relative to its opportunity.
