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Technology Stocks : Investing in Exponential Growth

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From: Frank Sully6/24/2022 12:02:06 AM
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Update: NVIDIA: A case study In Exponential Growth and AI

NVIDIA is a major player in AI & Robotics chips and software and will continue its exponential growth for many years in the future. Its future growth will be driven by Data Center AI chips and software and AI chips and software for the Onmiverse, Digital Twins and Digital Avatars, operating in AI & Robotics chip and software markets projected to grow at a 38% CAGR over the next five years, growing five-fold over this time. From 2011 to 2020, its share price grew 22-fold, a CAGR of 36%, as NVIDIA transformed itself from a gaming graphics chip company to an AI company, following the vision of its CEO Jensen Huang, who realized fhe applicability of its GPU chips (which NVIDIA invented) to deep neural networks AI computing due to its ability to do parallel processing.

Despite it's exponential growth over the past decade and seemingly rich valuation, I predict that it will continue to grow at a 41.3% CAGR over the next five years, growing five-fold. I feel like we've found that pot of gold at the end of the rainbow.

AI is a huge market and these companies are already benefiting

Chris Neiger (TMFNewsie)

Dec 15, 2020

Artificial intelligence (or AI) gets a lot of attention these days because the technology is being implemented into so many parts of our lives, from smart speakers to apps. And as AI expands, the opportunity for investors is enormous. Over the next four years, AI spending is estimated to double and reach $110 billion by 2024, according to research firm IDC.

For investors looking to tap into this enthusiasm for AI, there are a handful of companies pushing artificial intelligence forward. Here's why NVIDIA ( NASDAQ:NVDA), ( NASDAQ:AMZN), and Appian ( NASDAQ:APPN) should be on your AI stock buy list.

Image source: Getty Images.

1. NVIDIA For many years NVIDIA's core business came from selling graphics processors for gaming. But as data centers have become more complex, many companies have looked to NVIDIA's GPUs for their artificial intelligence data centers.

This shift has helped NVIDIA's data center revenue grow quickly and back in August the segment outpaced gaming revenue for the first time. In NVIDIA's most recent quarter, data center sales spiked 162% to $1.9 billion. Not all of the data center sales came from AI, but as more companies aim to boost their AI data center capabilities, many of them will look to NVIDIA's GPUs to help them do so.

<<< Update: The global data center accelerator market size is projected to grow from USD 13.7 billion in 2021 to USD 65.3 billion by 2026; it is expected to grow at a CAGR of 36.7% from 2021 to 2026.

Factors such as growing demand for deep learning and surge in demand for cloud-based services are driving the growth of the market during the forecast period. >>>
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