Nvidia Faces Stock Pressure Despite Robust AI Growth Amidst Potential Google Competition
Nvidia, a key player in the artificial intelligence chip market, experienced a downturn in shares on November 26, 2024. Despite its continued market dominance, the stock fell by over 6% in early trading. This decline followed reports suggesting that Meta, one of Nvidia’s significant customers, might potentially collaborate with Google. The partnership would involve using Google’s tensor processing units (TPUs) for data centers.
Interestingly, this decline occurred in spite of Nvidia’s stellar financial performance. The company’s 2024 revenue reached a whopping $130.50 billion, marking a 114% increase from the previous year. Furthermore, Nvidia’s data center revenue has been on an exponential growth trajectory. Analysts project this trend to continue as more companies embrace AI-driven solutions.
However, the competition landscape is heating up. Google’s TPUs offer an impressive performance-per-dollar ratio, posing a significant challenge to Nvidia’s market dominance. Despite these concerns, analysts maintain an optimistic outlook. The average 12-month target stands at $248.26, indicating nearly 40% upside potential. Major cloud providers such as Microsoft, Amazon, and Oracle continue to rely on Nvidia’s chips for their AI infrastructure investments.
Source: Stock Analysis