Beth Kindig, the lead tech analyst at the IO Fund, talked about NVDA stock about two months ago in an interview with FOX News (NASDAQ: FOX), when it was trading at approximately $793. After the interview, NVDA stock experienced a massive run-up in March, hitting an all-time high of $950, an impressive 20% upside from when Kindig recommended buying the dip.
It’s fair to say that Kindig really knows what she’s talking about. This leads us to another prediction she previously made: Nvidia (NASDAQ: NVDA) will become a $10 trillion company by 2030. Here’s why she thinks so.
The $10 Trillion Prediction
Currently, NVDA stock is trading at $795, indicating another potential buying opportunity. Kindig said that in 2021, she predicted that Nvidia would surpass Apple (NASDAQ: AAPL) and become the world’s most valuable company. That prediction was considered audacious back then. But now, it seems highly likely because Apple is currently struggling to grow and was surpassed by Microsoft (NASDAQ: MSFT) at the beginning of the year. Apple currently has a market cap of $2.56 trillion, while Nvidia’s market cap is $1.99 trillion, so the chip maker catching up isn’t entirely impossible.
Last month, Kindig appeared on the On Watch by MarketWatch podcast and discussed where she thinks the AI industry is heading. She thinks that consumers won’t pay much for generative AI. Still, she believes businesses will because they always look for ways to increase productivity and lower costs. To her, this narrows down the companies that will win in this generative AI race because the more a company invests in generative AI, the more it secures its position in the sector. She gives Microsoft as an example of a company that’s doing really well in this area.
But Nvidia also greatly benefits from generative AI. Big names in tech like Microsoft, Alphabet (NASDAQ: GOOG), and Meta (NASDAQ: META) pay billions of dollars to Nvidia every year to get the chip maker’s GPUs so they can create AI cloud instances or new AI software for their customers.
Nvidia’s AI Software Potential
Kindig’s $10 trillion target for Nvidia is based mainly on how the company could capitalize on AI software. Nvidia has a massive head start with AI software thanks to its CUDA platform, which developers use with the company’s GPUs. During Nvidia’s GTC 2024 event, CEO Jensen Huang was very specific about Nvidia getting into software beyond CUDA. He also said that while Nvidia expects to make more money from software, that doesn’t mean that the company would actually be competing with its software customers like Salesforce (NYSE: CRM) and ServiceNow (NYSE: NOW).
In fact, Nvidia teamed up with ServiceNow earlier this year to create a customer-service platform that will use Nvidia’s AI technologies to boost the productivity of customer service agents, and enhance customer experience. This type of platform comes at a very strategic time, as many companies are now looking for ways to reduce costs so they can explore new business opportunities, and one way they can do that is by turning to AI and automation.
That’s why Nvidia announced Nvidia NIM in GTC 2024, a new software platform designed to streamline the deployment of custom and pre-trained AI models into production environments. NIM makes accessing Nvidia’s optimized inferencing software easier by packaging it together with a model into a container, allowing easy deployment as a microservice. According to Nvidia, it typically takes developers weeks, if not months, to ship similar containers, and that is if the company has any in-house AI talent. With NIM, Nvidia clearly aims to create an ecosystem of AI-ready containers that use the company’s hardware as the foundational layer and these curated microservices as the core software layer for companies that want to speed up their AI roadmap.
This is one way Nvidia is expanding its presence in the AI software space. But Kindig also said that Nvidia will start renting out GPUs to unlock a new revenue stream because GPUs are very expensive and hard to develop, so offering a renting option might increase the already explosive demand for Nvidia’s GPUs even more.
Nvidia’s Robotics
Kindig also sees a lot of opportunity in the company’s Omniverse platform, which allows people to train robots in a virtual world, and that’s a lot better and more efficient than trying to train them in the physical world. Given that Omniverse is used to train AI-powered robots, and the AI robots market is expected to reach a valuation of $184.75 billion by 2030, there’s a massive opportunity for Nvidia there.
Not only that, but the company is betting big on robots with its own products, including the recently announced project Groot, which is a general-purpose foundation model for humanoid robots. It might take a few years before we start seeing companies producing humanoid robots on a large scale, but there certainly have been impressive demos of robots that showed their great potential, like the most recent demo released by Tesla (NASDAQ: TSLA) for its Optimus humanoid robot.
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