The stock is up 167% so far in 2023, and some analysts think there’s still plenty of room for growth. Wall Street analysts rushed to boost their price targets on Nvidia on Thursday, with some reaching as high as $500 per share. The stock closed at $389.46 on Friday.
Here’s why the Santa Clara, California-based firm is pulling ahead of the pack in the AI arms race.
“A true visionary”
“Over a decade ago, [CEO] Jensen Huang understood where the market was going to go, so [Nvidia] invested billions of dollars in not only silicon, but software,” Ted Mortonson, tech strategist at Baird, told Insider on Friday. “And Jensen understood where the market was going before the market even materialized, so he is a true visionary,”
Mortonson highlighted the success of Nvidia’s H-100 graphic processor unit, which was released last year.
According to Mortonson, the H-100 has enabled “a leapfrog in training, inference, basically generative AI,” and it’s this specific chip that allowed ChatGPT to make its big debut last November.
While Nvidia has the best chip on hand to power AI capabilities, it also has the right software and silicon stack to keep a competitive moat around its business.
“They have the entire AI silicon stack. And those are basically three components. They have the most advanced GPU, they have advanced networking embedded in the silicon, advanced memory embedded, and they’re now developing a new CPU,” Mortonson explained.
In other words, Nvidia is a one-stop shop for what companies need to drive their AI ambitions. They control their entire ecosystem, on both the hardware and software side, similar to Apple with its iPhone and iOS system, Mortonson said.
“When you cobble all these things together, it is an integrated immensely powerful AI engine. And they are years ahead of anyone else,” Mortonson said, highlighting Nvidia’s software development of CUDA, which is far ahead of its closest competition.
Morton was adamant that the success of the company is the result of Huang’s foresight, comparing him to other tech icons like Tesla CEO Elon Musk.
“Their expertise in GPUs through their vision got them to the level of basically enabling AI broadly across every single industry. So this is truly through Jensen’s leadership, and I think he’ll go down as one of the great technologists of our age, along with Elon,” Mortonson said.
“Nvidia is clearly going to be the biggest winner”
Equity analyst Angelo Zino at CFRA told Insider that Nvidia deep history of GPU expertise and its current control of the GPU data center market means it will continue to lead the pack in the AI space.
“Nvidia is clearly going to be the biggest winner in our view. They are the inventor of GPUs, invented back in 1999. They own over 95% of market share of the GPU market within the data center space,” Zino said.
While CPUs, developed mostly by Intel and to some extent AMD, are unable to handle the large processing power necessary to run AI, Nvidia’s GPUs can.
“Over the years, people have realized that these GPUs have the ability to solve some of the most difficult kind of computing problems out there…and Huang had a vision of this eventually taking place,” Zino said.
He added that demand for GPUs will make for an enormous market for Nvidia to address, and not just for its core business in gaming and data centers, but for autonomous vehicles and a host of other technologies.
“How they work with these enterprise companies is invaluable and a big reason why we do think that they’re likely going to sustain a market share position north of 90% in the foreseeable future,” Zino concluded.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
