Amidst global tech stocks playing seesaw, moving back and forth, NVIDIA Corporation moving one way has become one of the best growth stocks to buy now. The latest announcement regarding Soft Bank to get first new Nvidia chips for Japan supercomputer has further strengthened the chip maker. In an increasing addressable market, it is among the top growth stocks now.
On November 12, 2024, NVIDIA Corporation highlighted its role in transforming Japan's industries through the power of AI and digital twins. Key partnerships with major Japanese companies like Toyota, Yaskawa, and Seven & i Holdings are showcasing the use of NVIDIA’s Omniverse and Isaac platforms to advance robotics, digital twins, and industrial AI. These innovations are particularly critical for Japan, as the country faces a looming workforce shortage, with an expected 11 million fewer workers by 2040. For instance, Toyota is using NVIDIA's Omniverse to simulate robot motion in metal forging processes, reducing training times for robots. This push toward "Physical AI" is also visible in applications for robot-assisted manufacturing and industrial inspections, which are expected to revolutionize Japan’s manufacturing capabilities.
In NVIDIA's Q2 FY25 Investor Presentation, the company reported a record revenue of $30 billion, a 122% year-over-year increase, exceeding their initial expectations. Data Center revenue surged 154%, driven by strong demand for their Hopper GPUs and networking solutions, which are critical for accelerating generative AI workloads. Gaming revenue also grew by 16%, with notable developments like the rise of RTX AI laptops and new gaming titles incorporating generative AI features. Additionally, NVIDIA's expansion into Ethernet for AI networking saw impressive growth, doubling quarter-over-quarter. The company announced a $50 billion share repurchase program, underlining its strong cash flow and shareholder return focus.
NVIDIA's AI platforms are increasingly being adopted across industries. Their Isaac robotics platform is at the core of autonomous machine development, with companies like Boston Dynamics and Siemens integrating it into their robotics systems. Additionally, NVIDIA's Omniverse is empowering manufacturers like Foxconn to create digital twins of their factories, facilitating more efficient production planning. The NVIDIA NIM (Inference Microservices) and ACE (AI Conversational Experience) microservices are transforming the development of generative AI applications, allowing enterprises to deploy AI solutions faster and with more customization. This trend is expanding to sectors like gaming, healthcare, and customer service, where digital humans and AI-driven avatars are becoming more prevalent.
Looking forward to the third quarter of fiscal year 2025, NVIDIA expects to generate revenue of $32.5 billion, with strong growth projections continuing in its Data Center and Gaming divisions. The company anticipates gross margins around 74.4% GAAP, supported by the ongoing demand for its Blackwell and Hopper platforms. While NVIDIA faces supply constraints for Blackwell, the demand remains robust, signaling strong future earnings potential. NVIDIA's third-quarter earnings report will be released on November 20, 2024, and is expected to highlight continued momentum in generative AI, networking for AI infrastructure, and robotics applications, positioning the company for long-term growth in these rapidly expanding markets.
Source: Company’s Report
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