Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.
In 2024, Microsoft (NASDAQ: MSFT) purchased 485,000 of Nvidia’s (NASDAQ: NVDA) “Hopper” chips, marking a substantial investment in AI infrastructure larger than any of its tech rivals. This aligns with Microsoft’s role as the largest investor in OpenAI, utilizing its Azure cloud infrastructure to train OpenAI’s latest models.
The tech giant is also channeling considerable resources into data centers to support AI-driven services like Copilot and Azure. This strategic spending positions Microsoft at the forefront of AI development, setting it apart from competitors and making it one of Nvidia’s most important customers.
Microsoft Outpacing Rivals Significantly in Nvidia AI Chips Purchases
When acquiring Nvidia chips, Microsoft is outpacing its rivals significantly. The company has procured twice as many chips as its largest U.S. and Chinese competitors.
In contrast, Meta (NASDAQ: META) purchased 224,000 chips, Amazon (NASDAQ: AMZN) acquired 196,000, and Google (NASDAQ: GOOG) secured 169,000. ByteDance and Tencent each bought around 230,000 chips.
Microsoft’s orders are more than triple the amount it purchased in 2023, highlighting its aggressive expansion strategy in AI technology. This substantial investment enhances Microsoft’s capabilities and provides Nvidia with a critical revenue stream, helping to elevate its market valuation.
Nvidia has seen its valuation soar to over $3 trillion, mainly driven by high demand from major tech companies like Microsoft. The substantial orders from Microsoft significantly contribute to Nvidia’s revenue, affirming its leadership in the GPU market.
However, Nvidia faces potential challenges as competition intensifies from companies developing custom AI chips. Despite these pressures, Nvidia remains proactive, introducing the successor to the Hopper chip, Blackwell, to sustain its market dominance.
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NVDA Stock Brief
The stock of Nvidia (NVDA) has experienced notable price fluctuations, reflecting investor sentiment and market dynamics. As of 10:10 EST, the stock was trading at $134.63, slightly above its previous close of $130.39. The day’s trading range has seen a low of $132.81 and a high of $135.78.
Over the past year, Nvidia’s stock has varied significantly, with a 52-week low of $47.32 and a high of $152.89. These movements indicate a volatile yet promising market environment influenced by Nvidia’s strategic initiatives and external market factors.
Market analysts maintain a strong buy recommendation for Nvidia, with a recommendation mean of 1.3125. The target price range for Nvidia stock spans from a low of $130.00 to a high of $220.00, with a mean target price of $172.3763. Recent historical closing prices show a slight downward trend, with the stock closing at $130.39 on December 17, 2024, down from $139.31 on December 11.
Despite these fluctuations, Nvidia’s robust financial metrics suggest a positive long-term outlook, including a market cap of over $3 trillion and a strong revenue base.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
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