Nvidia just dropped some impressive news that’s got the investment world buzzing again. The company surprised everyone by reporting remarkable sales figures worth $35.1 billion for its third quarter that ended on October 27. This achievement shot past the $32.5 billion they had forecasted. In the ever-evolving AI landscape, surpassing predictions like this is becoming second nature for Nvidia.
But despite these jaw-dropping results, the company’s shares have slipped around 7% after the fiscal third-quarter results were shared. Even CEO Jensen Huang couldn’t keep the excitement contained during the earnings call with some very upbeat comments. Yet, what really got investors talking were things he said a week before the earnings announcement.
Jensen Huang was attending an AI summit in Japan on November 12, and he set the stage for Nvidia’s future in a way that gave investors plenty of reasons to keep their faith in the tech giant.
Even as he tackled manufacturing and quality issues with their latest Blackwell AI architecture during a November 20 earnings call, Huang had promising news to share. Production is not just on track; it’s exceeding expectations. Demand for Blackwell units has outstripped supply, which is always a good sign in the tech industry.
Rewinding a bit, at the Japan summit with SoftBank’s CEO Masayoshi Son, Huang didn’t hold back on how widespread he anticipates Nvidia’s AI platforms, like Blackwell, will become.
The friendship between Huang and Son is longstanding. Huang half-jokingly recalled how Son once suggested lending him the money to buy Nvidia outright. Reflecting back, he admitted, “Now I regret not taking you up on that.” This was shortly after SoftBank acquired Arm Holdings, another giant in the chip design world, for $32 billion. Interestingly, SoftBank still controls 90% of Arm after re-entering public markets in 2023.
The highlight from Huang at the summit was the announcement of a partnership with SoftBank to create a massive AI infrastructure in Japan, using Nvidia’s DGX platform. This venture will take Nvidia’s AI capabilities to a whole new level in Japan.
The Nvidia DGX platform is at the heart of their AI development, offering a seamless blend of software, infrastructure, and expertise. SoftBank plans to integrate this AI technology within its telecom network, which will permeate across 200,000 sites in Japan, setting the stage for a revolutionary AI-driven landscape.
Moreover, SoftBank is set to launch an “AI store” for its 55 million subscribers, built on Nvidia’s technology. Huang referred to this approach as “completely revolutionary,” possibly the first major step toward transforming a communications network into an AI-powered one.
Huang also forecasted a future where AI integration could completely overhaul other sectors, from streamlined operations in customer service to the management of autonomous vehicles. The potential is vast. Imagine entire factories transformed with AI, where managers interact seamlessly with advanced systems to monitor operations and report anomalies or daily activities.
For those concerned about Nvidia’s stock being overvalued, the emerging possibilities with enterprise AI are anything but tapped out. The company’s CFO, Colette Kress, recently disclosed the dispatch of their first Blackwell DGX samples to OpenAI, indicating the beginning of a promising collaboration.
Huang’s enthusiasm for what lies ahead is palpable. As these projects in AI continue to expand, Nvidia remains a compelling choice for investors focused on growth.
Many might feel they’ve missed out, but Nvidia’s narrative is far from over. Rare instances arise when analysts recommend doubling down on stock, and if Nvidia is any measure, those investments pay off hugely.
The evidence? An investment of $1,000 in Nvidia when they were a ‘double down’ pick back in 2009 would have grown to $355,011 today.
If you think timing is everything, consider this: similar advice on Apple in 2008 and Netflix in 2004 yielded substantial returns. Now, our team is issuing ‘Double Down’ alerts on three other companies ripe for investment. Don’t let this opportunity slip away.
*Stock Advisor returns as of November 25, 2024
Howard Smith is personally invested in Nvidia, as is The Motley Fool, which upholds a clear disclosure policy.
