Nvidia (NASDAQ: NVDA) is set to begin shipping its new Vera Rubin chip architecture in the third quarter of 2023, which promises to significantly reduce costs for AI inference and training. The company reported Q1 revenue of $81.6 billion, with $75.2 billion stemming from its data-center division, reflecting an 85% year-over-year increase. Despite the hype surrounding the new technology, Nvidia has not yet generated any revenue from this architecture.
Nvidia expects a continued build-out in the data-center sector, with 2027 capital expenditures projected to exceed $1 trillion, potentially reaching $3 trillion to $4 trillion by 2030. This trend is backed by major clients, including Alphabet, which anticipates higher spending on data infrastructure going into 2027.
Currently, Nvidia trades at approximately 27 times forward earnings, suggesting the market is not fully accounting for future growth. Analysts believe that even with a reduced growth rate of 50% year over year, the company’s current valuation represents a favorable investment opportunity.
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