Technology companies of all shapes and sizes have bet their futures on artificial intelligence. The shockwave felt by nearly everyone after the release of OpenAI’s ChatGPT was the catalyst for the current AI land grab, and subsequent releases of its model, as well as other advanced models released by competitors, are fueling an all-out king-of-the-hill battle among tech giants.
Among the top contenders is semiconductor company Nvidia (NASDAQ: NVDA). Once an obscure name among more well-known tech companies, Nvidia has bolted to the top of many investors’ buy lists and jockeys for the most valuable company title with Apple.
There’s a risk of choosing Nvidia as a top AI stock for the next decade simply because it’s been a big winner over the past few years. But there’s also a risk in ignoring the company’s clear advantages in the AI market and settling for lesser AI stocks.
Here’s why I think Nvidia may go the distance over the next 10 years.
Nvidia designs some of the world’s most advanced processors. It doesn’t manufacture them (check out Taiwan Semiconductor if AI chip-making is your thing) but instead uses a fabless semiconductor model, designing chips that have become integral to the tech industry.
Nvidia’s processors account for an estimated 70% to 95% of AI chips, giving the company a massive lead among competitors like Advanced Micro Devices. To stay a few steps ahead of its rivals, Nvidia continues to release new AI chips that tech companies are knocking down its doors to get their hands on.
For example, its Blackwell processor is the next iteration of its AI processor, and Nvidia’s CFO, Colette Kress, said on a recent earnings call that the company is ramping up production to keep up.
“Blackwell demand is staggering, and we are racing to scale supply to meet the incredible demand customers are placing on us,” Kress said. With its lead already well-established and the company continuing its history of releasing advanced AI processors that outpace rivals and satisfy customers, it’s likely there are many more years ahead for Nvidia’s growth.
Having in-demand chips right now is one thing, but parlaying that opportunity into a years-long opportunity is quite another. That’s why the massive data center market is such an important factor for Nvidia.
Nvidia CEO Jensen Huang estimates that data center spending will accelerate over the next few years as companies aim to dominate AI in cloud computing and develop AI models. Huang said a few months ago that technology companies could spend up to $2 trillion over the next five years as they try to race ahead of each other.
