Nvidia (NASDAQ:NVDA) has long dominated the market for high-end graphics processing units. Gamers and content creators have already been quite familiarized with Nvidia’s GPUs for years now. However, Nvidia stock has been redefined by generative artificial intelligence.
Nvidia’s share price has skyrocketed more than 219% over the past 12 months. Shares now trade at around $904/share. Despite market volatility, here are 3 reasons why NVDA will finally make it to $1000/share.
AI and Nvidia Stock
Artificial intelligence is driving the creation of innovative products across all major sectors, and it’s not just U.S. companies who are taking advantage of the AI craze. Businesses in Europe and across Asia, including Japan, South Korea, and countries in Southeast Asia, are trying to get a piece of the growing pie as well.
Nvidia will play an important role in meeting this unprecedented demand for AI chips. The chipmaker’s past three quarterly reports have seen revenue growth in the triple-digits and net income balloon as a result. With the AI chip boon showing no signs of letting up, Nvidia stock will, without a doubt, be a main beneficiary.
Competition in AI
Competition to roll out AI products might be fierce, but competition in the AI chip market itself has been comparatively slower to flare up. Nvidia continues to be the biggest game in town when it comes to the sale of AI-powering GPUs.
Chipmakers AMD and Intel have made some buzz as they have announced new AI chips to compete with those of Nvidia. However, Nvidia has had a long head start. AMD announced its brand of AI chips dubbed “MI300x,” yet these chips have yet to enter the mass market.
Intel has had even more troubles. The company has fallen behind in its manufacturing capabilities to the point where it decided to grant more autonomy to its Foundry business to help spur innovation and growth.
Unfortunately, in their Q1 earnings report, Intel reported slow growth in its Data Center and AI business unit. The recently revealed Gaudi 3 AI processors are also months away from hitting the wider market.
These developments will solidify Nvidia’s lead in the AI market for some time.
NVDA Beyond AI
While Nvidia enjoys a significant lead in the AI chip race, it, so far, has not let that prevent further innovation. Rather, the acclaimed chipmaker continues to plunge a lot of R&D dollars into developing new chips.
The most recent release of its new Blackwell GPUs not only have a new state-of-the-art architecture but also will allow the development of AI models more powerful than what we have these days.
Nvidia’s chip sophistication doesn’t stop there. The chipmaker has played an immense role in the creation of the computers of tomorrow: quantum computers.
Nvidia’s open-source CUDA-Q platform has powered quantum computing development in the United States, France, Germany, Switzerland, Poland, and Japan.
The chip giant’s foray into this nascent market could help widen the pool of future opportunities from which to create more shareholder value.
On the date of publication, Tyrik Torres did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.