This article analyzes NVIDIA's meteoric rise, highlighting its dominance in the AI landscape. It delves into CUDA's role in fueling NVIDIA's success and examines how the company has evolved beyond a mere semiconductor provider to become a critical player in AI, cloud, and internet infrastructure.
The company’s technological advancements unleashed a sleeping beast, and its position in the industry is now unrivaled.
What this means for NVIDIA is that it is no longer simply a semiconductor stock. Now, NVIDIA is critical to AI, cloud, and Internet infrastructure, providing the hardware to build the most advanced data centers, the software to operate them, and services built upon both. NVIDIA’s newest offerings are off-the-rack AI models, AI-powered generative services, and enterprise-grade software.
NVIDIA has outperformed the consensus estimates 100% of the time since Q3 2022 and only missed consensus once since before 2020. Outperformance since 2023 has been compounded by increased guidance, often running 500 basis points or more above the consensus forecasts, which is also expected to continue. Recent commentary from Super Micro Computers, which wowed investors with projections for shipments of its latest GPU products, aligns with that outlook.
Another catalyst eyed by retail investors is the dividend. NVIDIA’s dividend isn’t robust but reliable, and growth is expected. The surge in earnings power resulted in significant cash buildup, with positive cash flow expected to remain robust, raising the chances for significant distribution increases. As it is, the $0.01 per share distribution is worth about 0.03% in yield and only 1% of the earnings outlook. Share repurchases also compound the dividend.
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