According to industry sources on the 23rd, NVIDIA, a titan in the artificial intelligence (AI) industry, reported surprising performance for the first quarter. NVIDIA recorded $26 billion in revenue in the first quarter (February to April) of this year. This is a 262% increase from $7.192 billion recorded in the same period last year, confirming its dominant position as a top company in the industry. This also exceeded the $24.69 billion forecasted by Wall Street earlier this year.
Following the revenue, operating profit also recorded a strong performance. NVIDIA achieved an operating profit of $16.9 billion this year, which is about eight times the $2.14 billion recorded last year. It also outperformed Wall Street’s forecast of $12.83 billion at the beginning of the year. Additionally, adjusted earnings per share (EPS) soared by 461% to $6.12.
In the tech industry, the major opinion is that “NVIDIA’s dominance in the AI semiconductor market has been publicly proven through its first quarter earnings announcement.” Recently, various companies in the big tech industry have started designing their own chips to compete against NVIDIA’s, and competitors like AMD are also developing their own AI semiconductors, leading to aggressive marketing.
However, this performance proves that NVIDIA’s power is still effective. Furthermore, some experts have concluded that NVIDIA’s strength is not yet at its peak. In an interview with Bloomberg on the 21st (local time), Vijay Rakesh, a senior analyst at Mizuho Securities, claimed that “NVIDIA’s best moment has yet to come.”
According to the interview, he said, “NVIDIA seems to have a very successful report card this year as well,” and “I expect NVIDIA to record over $90 billion in revenue this year.” He also mentioned that “NVIDIA is expected to record explosive growth of nearly four times by 2027” and “The important thing here is that NVIDIA is introducing full-stack servers beyond making GPUs.”
With NVIDIA’s surprising performance, interest in AI beneficiary stocks is also increasing. Many investors expect the AI industry to expand and AI beneficiary stocks to rise sharply accordingly. AI beneficiaries’ stocks spread from companies that possess core technologies. For example, starting with NVIDIA, there is a stock rally in companies boasting highly generative AI technology like Microsoft and various AI service providers like Open AI.
Therefore, many experts argue that if you watch where the concentric circles spread in the big theme of the AI industry, you can seize various opportunities. However, you should consider both short-term and long-term when investing in beneficiary industries.
As a result, Goldman Sachs, a U.S. multinational investment bank, has become a hot topic of conversation among individual investors. Goldman Sachs focuses on investing in long-term beneficiaries rather than short-term ones. In February this year, Goldman Sachs mentioned names like Occidental Petroleum, Walmart, and Amazon.
According to a CNBC article, Goldman Sachs chose these companies, analyzing that “AI technology is in its early stages but is growing rapidly” and “we need to pay attention to long-term beneficiaries rather than well-known tech stocks reflecting the stock consensus.”
Furthermore, some point to Small Modular Reactors (SMR) as AI beneficiaries. These small modular reactors are considered a field that can make the AI boom a reality with cheap energy. They are not only safer than existing nuclear power plants but also small and can be assembled like Lego, making them suitable for deployment where needed. SMRs are considered next-generation technology as such a background is evaluated as a good means for data centers that store important data in AI technology. According to the World Economic Forum, SMRs are expected to grow at an annual average of about 30%.
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