During the break week at the conference organized by Envidia
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the company’s CEO Jensen Wang revealed a wide range of partnerships and products that will enable the latest services in the world of Generative Ai when all of them will be powered by Nvidia chips.
“Generative Ai has created a turning point in technology,” said the CEO, adding that this is something that will increase demand for the company’s products. “This is truly a new computing platform.”
Generative Ai products are roughly trained on text, images and videos to generate content. Interest in this type of artificial intelligence arose after OpenAI released ChatGPT late last year. The hope is that the need for the chips that Nvidia produces to train AI models for Generative AI-based services will contribute to the demand for the company’s products.
Analyst Stacey Rasgon wrote “We are at the beginning of the adoption curve (of new technology), over time we believe that the total target market value will reach billions of dollars as the artificial intelligence models become more complicated and more people adopt the technology”, Stacey raised the target price per share to 300 dollar from $265 and said that the company’s forecasts are “leaning upwards” and the company’s stock is the best way to participate in the artificial intelligence craze.
Market estimates are that ChatGPT alone could generate $300 million in revenue for Nvidia. That’s a conservative guess, since according to another Citigroup estimate, increased use of ChatGPT could increase Nvidia’s annual revenue by $3 billion to $11 billion, all in a market that generated $27 billion in revenue last fiscal year
In its financial statements for the fourth quarter of 2022, its revenues amounted to $6.05 billion, higher than analysts’ expectations for revenues of $6.01 billion.
Revenue for Nvidia’s AI-powered data center business jumped from $968 million in the fourth quarter of 2019 to $3.62 billion last quarter. But the chip maker, like the rest of the gaming industry, is also facing a decline in sales compared to the same period last year – in the third quarter, the company’s gaming business revenues collapsed by 51% year-on-year. The coronavirus has sent gamers scrambling for graphics cards and PCs running Nvidia hardware so they can play the big games like “Call of Duty,” “Fortnite” and “Roblox.” It’s just that now that they have this hardware, they don’t need to upgrade, which is expected to make Nvidia’s gaming revenue soar.
Nvidia shares have risen 80% since the beginning of the year and trade at a value of 652 billion dollars.
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