Nvidia’s Groundbreaking Conference Sets the Tone
This past week, tech enthusiasts were abuzz with excitement over Nvidia’s GPU Technology Conference (GTC), often likened to the “Woodstock of AI.” The event saw the gathering of industry giants, both in person and virtually, to witness CEO Jensen Huang’s unveiling of Nvidia’s latest AI innovations. The aftermath of this conference cast a lengthy shadow over the AI market, impacting the likes of SoundHound AI, BigBear.ai, and Super Micro Computer.
Among the casualties, SoundHound AI saw a staggering 25% drop, BigBear.ai stumbled 15.2%, and server manufacturer Super Micro Computer experienced a 9.1% decline by Thursday’s market close, according to data from S&P Global Market Intelligence.
Nvidia’s Blackwell Architecture: A Game-Changer in AI Processing
Nvidia stole the spotlight by introducing its groundbreaking Blackwell architecture, poised to succeed its immensely popular Hopper processors as the go-to solution for AI processing. CEO Jensen Huang dubbed the B200 GPU as the “world’s most powerful chip” for AI, featuring cutting-edge technology to drive AI applications. The integration of a Grace CPU and two B200 processors on the GB200 Superchip promises unparalleled performance, supported by the new NVLink network switch chip to streamline chip communication and enhance AI processing capabilities.
From individual GPUs to expansive data center solutions, the Blackwell chips offer a versatile range of configurations to cater to diverse AI needs.
Company-Specific Ripples Post-GTC
While GTC was the epicenter of market shifts, individual companies also made waves:
- In tandem with GTC, Super Micro Computer unveiled three Nvidia-based generative AI systems optimized for AI workloads.
- SoundHound AI announced its integration of on-chip voice AI on the Nvidia Drive Platform, paving the way for in-vehicle generative AI capabilities even without internet connectivity.
A Rollercoaster of Company-Specific Events
Amid the GTC fervor, other noteworthy company-specific events spurred fluctuations:
- Super Micro Computer ascended to the S&P 500, attributing its recognition to remarkable sales growth and market cap expansion.
- Capitalizing on its success, Supermicro initiated a secondary stock offering expected to raise around $1.75 billion.
- SoundHound AI faced a damning short report from Capybara Research, punctuated by a sobering double downgrade to sell from Cantor Fitzgerald, citing overvaluation and underlying concerns.
When assessing investment opportunities, the metrics paint a clear picture:
Super Micro Computer and BigBear.ai boast comparable valuations with a forward price-to-sales ratio of approximately 2, contrasting SoundHound AI’s multiple of 20. Coupled with their lack of profitability, Supermicro emerges as the prudent choice among the trio.
Before diving into SoundHound AI stock, consider this:
The Motley Fool Stock Advisor team identified the top 10 stocks for investors, omitting SoundHound AI. This actionable insight aims to guide investors toward lucrative opportunities, with a track record of outperforming the S&P 500 since 2002*.
Explore the top 10 stocks here
*Stock Advisor returns as of March 21, 2024
Disclosure: Danny Vena holds positions in Nvidia and Super Micro Computer. The Motley Fool has positions in and recommends Nvidia. The Motley Fool upholds a transparent disclosure policy.
The opinions expressed herein are solely those of the author and may not reflect the perspectives of Nasdaq, Inc.
