Artificial intelligence (AI) has become the hottest investment theme, captivating the minds of both seasoned investors and newbies alike. This is not surprising, considering multiple research firms expect the AI market to be worth more than $1 trillion by 2030.
With the AI trend having the potential to generate windfall returns, investor interest in AI stocks is at an all-time high. Two stocks, namely Nvidia (NASDAQ: NVDA) and Marvell Technology (NASDAQ: MRVL), can prove to be compelling additions to any AI-focused stock portfolio. Here’s why these stocks are smart picks now.
1. Nvidia
Widely known as the poster child of the ongoing AI revolution, semiconductor giant Nvidia is making history in front of our eyes.
Nvidia has posted impressive results in the fourth quarter of fiscal 2024 (ending Jan. 28, 2024), with both revenue and earnings surpassing consensus estimates. This is an impressive performance, especially since the U.S. government’s rising restrictions on chip exports to China may force Nvidia to cancel billions of dollars of chip orders in 2024. Nvidia is also battling competition from other chip players such as Advanced Micro Devices and Intel, as well as from its key clients who are developing their proprietary AI chips.
Despite this, the technological superiority of Nvidia’s AI chips has enabled it to capture nearly 92% share in the global data center GPU market. The company’s state-of-the-art GPUs (A100 and H100 chips) and advanced networking technologies (which include the InfiniBand solutions used in high-performance AI infrastructures and the recently launched Spectrum-X end-to-end ethernet-based solution for AI-optimized networking) are being used extensively by data centers transitioning their trillion-dollar installed bases from general-purpose computing to accelerated computing. Furthermore, enterprises across industries are also leveraging generative AI technologies across use cases, which can also present a trillion-dollar opportunity for Nvidia’s AI-optimized hardware offerings. Plus, the demand for Nvidia’s chips is far outpacing supply,…
..
