New York, NY – Nvidia, the dominant player in the artificial intelligence chip market, is poised for continued growth in the coming year, according to Andrew Chang, a technology director at S&P Global Ratings.
Chang’s optimism is based on recent comments from Nvidia CEO Jensen Huang, who outlined strong demand for the company’s next-generation GPU, Blackwell. This aligns with the positive outlook expressed by Nvidia’s partners, such as Oracle, which has increased its capital expenditures and revenue forecasts.
Despite this bullish outlook, Chang acknowledges that investors have concerns about Nvidia’s sustainability. Some worry that the company’s rapid growth may not be sustainable, given its impressive stock performance over the past five years. Additionally, there are concerns that Nvidia’s largest customers may eventually develop their own AI chips, reducing their reliance on Nvidia’s products.
Chang emphasizes the importance of monitoring demand from hyperscale data center players, as their purchasing patterns can significantly impact Nvidia’s revenue. He also warns about the potential for tighter regulation of AI, which could pose challenges for Nvidia and other companies in the industry.
While Nvidia’s future appears promising, investors should be aware of these potential risks and closely monitor the company’s performance to make informed decisions.
