Nvidia Seems Poised to Enter the Multibillion-Dollar Custom Artificial Intelligence (AI) Chip Market
Nvidia (NASDAQ: NVDA) stock is on fire. Shares of the artificial intelligence (AI) chip leader have gained 81.5% so far in 2024, and are up 531% over the last three years through May 10. The S&P 500 index has returned 10% and 31.9%, respectively, over these periods.
The stock's gains are mostly being driven by powerful demand for the company's AI-enabling graphics processing units (GPUs) and related offerings for data centers. Nvidia has an estimated 80% share of the fast-growing market for data center AI chips.
But can Nvidia stock's great performance continue? Some investors are concerned the company could be hurt by the increasing trend among large technology companies, nearly all of which are Nvidia customers, of developing their own custom AI chips. They are doing so to optimize the chips to their specific AI workloads, which can have monetary and power advantages over using general processors, such as GPUs.
Source Fool.com
