After Nvidia joined the $1 trillion market club on Tuesday, Yahoo Finance spoke with experts, analysts, and strategists, who weighed in on the outlook for the company amid recent AI trends.
Yahoo Finance's Brad Smith spoke on the fanfare around Nvidia (NVDA) and AI. Smith said, "I'm going to break this down in three quick letters, it's A M C. At the top, you've got the applications that are going to sit on top of the M, the language-learning models, and at the bottom of it you've got the chips and the data centers."
KeyBanc Capital Markets Equity Research Analyst John Vinh discussed Nvidia's advanced software. Vinh said, "They've got millions of AI developers that are focused on the Nvidia ecosystem and it's really this software ecosystem that's going to give them a sustainable advantage for quite some time."
Yahoo Finance's Dan Howley explained what he thinks gives Nvidia an edge. Howley said, "People are really talking about how to get their chips at this moment. We're not talking about small firms either. We're talking about the likes of Microsoft (MSFT), Google (GOOG, GOOGL), Meta (META) ... Nvidia really is riding this hype train, and they're the conductor."
Annandale Capital Founder and Chairman George Seay discussed his thoughts on Nvidia and why investors should remain cautious on AI. Seay said, "Nvidia is going to be a big winner. And I think you've got to look at some of the others like Google and Amazon, some of the other beneficiaries of this movement, and basically spread your bets."
Video highlights:
00:00:03 - Yahoo Finance's Brad Smith
00:00:28 - KeyBanc Capital Markets Equity Research Analyst John Vinh
00:00:53 - Yahoo Finance's Dan Howley
00:01:24 - Annandale Capital Founder and Chairman George Seay
Video Transcript
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BRAD SMITH: As we think about Nvidia and how they've made their way into the ranks of, yes, the trillion club. What has the fanfare been about? It's about AI. And if you think about the layers of AI, we're going to break this down in three quick letters-- it's AMC. At the top, you've got the applications that are going to sit on top of the M, those models, the language learning models. And at the bottom of it, you've got the chips and the data centers.
JOHN VINH: I actually think that their differentiation and why they're so much further ahead really has to do with their software. If you think back to just the background of how Nvidia got started in gaming, I mean, they've got millions of basically AI developers that are focused on the Nvidia ecosystem. And it's really the software ecosystem that's going to give them a sustainable advantage for quite some time.
DAN HOWLEY: For years, they've been talking about how they're working on AI, they have these servers, how they have the software. So they're a full stack company from soup to nuts, and they're the best to do it. And their products are in short supply, so people are really fighting over how to get their chips at this moment.
We're not talking about small firms either. We're talking about the likes of Microsoft, Google, Meta. They're all trying to get their hands on Nvidia's servers and chips. And so Nvidia really is riding this hype train, and they're the conductor.
GEORGE SEAY: I think that the winners long-term are well identified by the market. Nvidia is going to be a big winner. And I think you've got to look at some of the others like Google, and Amazon, and some of the other beneficiaries of this movement and basically spread your bets.
And have a good portfolio that's diversified across all the various companies are going to benefit from this incredible capital investment move in AI. Warren Buffett and Benjamin Graham said many, many years ago, the market is, over the long-term is a weighing machine and you've got to have substance to go along with the hype.
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