NVIDIA (NASDAQ: NVDA) is currently dominating the market with popular stocks such as the H100, A100, and the new Blackwell semiconductor chips. Despite its reputation for GPU chips and data center services, the company’s revenue is split between computing and networking and graphics. NVIDIA’s success is largely due to its CUDA platform, which allows developers to create software applications that work in parallel with GPUs.
The importance of CUDA lies in its contribution to AI chip market share, with NVIDIA currently holding 80%. With the rise of AI model training and inference, CUDA provides the company with additional revenue streams beyond hardware sales. While competition in the chip space is increasing, CUDA’s software services offer flexibility and higher margins for NVIDIA.
In terms of stock performance, NVIDIA has seen a 156% increase so far in 2024, surpassing the S&P 500 and Nasdaq Composite. Despite its strong performance, the company’s P/E ratio has decreased over the past year, indicating that the stock may still be undervalued. With its leadership in the chip space and CUDA software business, NVIDIA is positioned for long-term success in the AI landscape.
Investors may want to consider adding NVIDIA to their portfolio, as the company’s continued growth and dominance in the AI market present a promising outlook. The Motley Fool has identified NVIDIA as one of the top stocks to watch for potential high returns in the coming years. With a solid track record and strong market position, NVIDIA remains a compelling investment opportunity for long-term investors.
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