NVIDIA Preview: AI Leadership & Partner Plays to Watch

Market Leadership

• NVIDIA (NVDA) remains the undisputed leader in GPU hardware, commanding ~80 % share of the discrete graphics market and ~90 % of AI-trained workloads.
• Data-center revenue accounted for over 70 % of Q1 25 sales, driven by hyperscale cloud and enterprise AI deployments.

Recent Performance & Valuation

• YTD total return: +85 % (outpacing the SOX by ~30 pp).
• P/E multiple: ~50× forward earnings—at the high end of historic trading ranges, reflecting robust growth expectations but leaving limited margin for error.
• Key Growth Drivers
  • AI Acceleration: Continued roll-outs of Hopper and Blackwell architectures for generative-AI, LLM training, and inference.
  • OEM Partnerships: Deep integration deals with AWS, Microsoft Azure, Google Cloud, and emerging cloud-natives like CoreWeave—each embedding NVIDIA accelerators into their infrastructure.
  • Edge & Automotive: Expansion of DRIVE™ platforms for autonomous vehicles and robotics, unlocking a multi-billion-dollar TAM over the next decade.
• Risks & Headwinds
  • Cyclical Capacity: Raw-material shortages (substrates, memory) could throttle supply, but ongoing node transitions at TSMC are easing these constraints.
  • Competition: AMD’s MI series and in-house ASICs at Big Tech may pressure NVIDIA’s share in certain segments.
  • Valuation Sensitivity: Street models assume >40 % revenue CAGR; any moderation in AI spend or macro-slowdown could trigger a re-rating.
• Upcoming Catalysts
  • GTC Conference (June 18–20): Potential unveil of next-gen AI chips and software stack enhancements.
  • Q2 25 Earnings (late August): Watch forward-guidance on data-center orders and margin targets.
  • Arm Acquisition Update: Regulatory progress (EU/UK filings) could resurface; a green light would cement long-term ecosystem control.

Conclusion: Stocks to Watch

• CoreWeave (CRWV) – NVIDIA-backed AI cloud provider; monitor its server build-out cadence and pricing power as a proxy for hyperscaler GPU demand.
• Super Micro (SMCI) – Leading ODM for GPU-dense servers; order momentum here often preempts NVIDIA’s data-center guidance.
• IonQ (IONQ) & Quantum Computing Inc. (QUBT) – Early-stage quantum hardware plays; watch for quantum-classical hybrid announcements leveraging NVIDIA’s cuQuantum SDK.
• TSMC (TSM) – Key foundry partner; its capacity roadmap and process-node yields directly impact NVIDIA’s supply and ASP.
• Marvell (MRVL) – Provides networking silicon in NVIDIA’s AI-optimized switches (Spectrum™); a barometer for end-to-end AI infrastructure upgrades.