Can NVDA grow further from here?

AFS shall endeavor to periodically publish original finance and investment-related articles for the benefit of AFS members, under the “In Our Opinion…” series. Our inaugural issue is on the fast-growing AI leader Nvidia (NVDA):

Some recent developments seem to answer that question in the affirmative:

(1) Jensen Huang, Co-Founder and CEO of NVDA, arrived in Taiwan on May 26, a week ahead of his previously announced keynote speech at the COMPUTEX Taipei 2024 in June.  His early arrival fueled local media reports that he may announce one or more of the following as early as Sunday, June 2nd: 

• Partnering up with Media Tek (联发科) to jointly produce autonomous driving / EV AI chips.  They will be using TSMC’s 3-nm semiconductors, instead of the 28 nm generally used in the industry today.  The automotive sector could become an important growth driver for the company.

• Partnering up with MSI (微星) to develop/manufacture AI PC.  This may include ARM’s participation.

• Establishing sovereign AI for Taiwan.  This could be replicated throughout the world. 

• Developing a second AI R&D center in southern Taiwan. NVDA already has one located north of Taipei, with four hundred employees.  This could further solidify NVDA’s dominance in AI semiconductors, as R&D is crucial to continued product innovations.

• Affirming supply chain relationships, especially with TSMC, whose leading-edge CoWoS packaging for high-end semiconductors is in extraordinarily high demand.

(2) Elon Musk’s xAI raised US$6 Billion from global venture capitalists to develop “the world’s most powerful supercomputer” and will be buying NVDA’s H100 GPU’s.  Musk wants to have the supercomputer operational by the fall of 2025, ahead of MSFT and OpenAI’s Stargate launch date of 2028.  xAI’s purchase order should contribute incremental profits to NVDA’s 2024 financial results.

Jensen Huang is a visionary comparable to Steven Jobs.  NVDA is already working with TSMC to develop Quantum Computers.  He and his company will lead us into the Fourth Industrial Revolution.  NVDA does not face many competitors right now.  The company will continue to enjoy a first-mover advantage in the foreseeable future. 

With multiple revenue drivers generating profits, NVDA can probably grow much further over the long term. 

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