Some investors are worried that NVIDIA Corporation (NASDAQ:NVDA) has hit its peak after its huge gains in 2016, due to an announcement by Amazon.com, Inc. (NASDAQ:AMZN) that it may sign up with other chipset providers for “Amazon Web Services” (AMS).
Other analysts remain bullish on Nvidia stock, not seeing these other chipmakers as a threat.
NVDA stock is having an absolutely fantastic year. Nvidia stock is up 178% since the beginning of 2016, and it has been one of the best stock picks. But last week, NVDA stock dropped about six percent after Amazon.com’s “AWS re:Invent” conference, where it was suggested that Amazon may use other chips besides Nvidia’s. (Source: “Should You Buy NVIDIA Stock Following The Recent Pullback? NVIDIA Corporation (NVDA),” Amigobulls, December 5, 2016.)
A part of Nvidia stock’s success this year is attributed to the increased usage of its chips in deep learning and machine learning development, two areas that are set to expand in the next few years.
While Amazon Web Services has suggested that it has now begun allowing field-programmable gate array chips access to certain functions, that doesn’t necessarily mean they will replace Nvidia stock’s chips.
For instance, some believe that the two chips will work together, rather than separately, or at least have very different areas of application.
Others speak of the strength of Nvidia’s chips in the deep learning and machine learning development to support why NVDA stock is still a winner.
The case for Nvidia stock from the bulls, if you boil it down, is that those who view deep learning, machine learning and artificial intelligence (AI) as areas set to grow in coming years would do well to look into NVDA stock.
But the picture isn’t totally rosy. For instance, Trinity Street Asset Management reduced its stake in NVDA stock by 46.41%, showing that not all are bullish on the chip producer. (Source: “Ownership Change Worth Mentioning: Trinity Street Asset Management Llp Position in Nvidia Corp (NVDA) Has Cut as Stock Value Rose,” Chester Independent, December 5, 2016.)
Whichever camp you fall into, however, NVDA stock is certainly one to watch. Whether its meteoric rise will parallel the development of AI or Nvidia stock will eventually fall behind, we’ll be following the tech giant very closely.