This AI Stock Is Primed to Be a Market Leader in 2020

NASDAQ:NVDA - AI Stock Could Be Ready to Lead the Market in 2020AI Stocks Set to Win Big

One of the most promising industries in the near future is the artificial intelligence (AI) sector. With applications that are theoretically limitless, AI  represents an opportunity we’ve never seen before: a technology that could change everything about how we live our lives.

With that in mind, betting on the right horse in the AI race could be one of the best investments you make in your entire life.

And that’s where Nvidia Corporation (NASDAQ:NVDA) comes in.

There are myriad reasons why I’m bullish on Nvidia stock, but the main one is pretty straightforward: the company’s focus.

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Nvidia has long been a leader in graphics processing unit (GPU) technology. Back when I started at Profit Confidential, Nvidia was one of the main companies I covered.

And now NVDA stock is among the top AI stocks for 2020.

The company’s technology is widespread and a focus of the gaming sector, where Nvidia Corporation and Advanced Micro Devices, Inc. (NASDAQ:AMD) are among the two dominant industry forces.

But Nvidia doesn’t only do computer games; it has become pretty adept at computers in general. And with that knowledge comes the company’s ability to dominate the AI sector.

NVDA stock is well suited to be a top AI stock in 2020 because of its dominance in the GPU space. The company’s processing units are typically specific and focused on handling a few discrete tasks very well, much faster than more general-purpose central processing units.

Both types of processing units are important to AI technology, but many of the largest segments of the AI market will rely on cutting-edge GPU technology. And Nvidia Corporation simply has no rival in that area at this point.

AMD, its biggest competitor, has not entered the AI space with much gusto yet, and no other company has the resources and history in the GPU industry that Nvidia does.

With both experience and a wealth of resources at its back, Nvidia stock could see massive growth as the AI industry expands.

I won’t bore you with the specific technical details of Nvidia’s newest GPUs, but they are impressive from a technological standpoint. The company’s technology is famously easy to use and integrate, which is why many other AI companies are using Nvidia technology as the baseline.

What’s even better for NVDA stock investors is that the company doesn’t have to wait to see financial gains, either. It’s already on a strong course in the video game sector and other markets. This makes Nvidia stock rather safe among AI stocks.

Chart courtesy of StockCharts.com

As can be seen in the above chart, NVDA stock has already registered strong gains in 2019.

It’s looking like 2020 and beyond will likely follow suit, with Nvidia share prices rising even further as the AI industry develops.

The Future of AI Stocks

A while back, Alphabet Inc (NASDAQ:GOOG)—also known as Google—made headlines as it claimed to have created a quantum computer that could complete complex calculations in a fraction of the time that the current supercomputers could.

This was a direct attack on another leading AI company: IBM (NYSE:IBM).

Google said its “Sycamore” quantum computer performed a task in 200 seconds that the world’s greatest supercomputer, IBM’s “Summit,” would take 10,000 years to perform. (Source: “Why Two Tech Giants Are Arguing About Quantum Computers,” The Atlantic, October 24, 2019.)

While the numbers came into dispute, ultimately everyone agreed that “Sycamore” had impressive technology.

Quantum computing, to give you the broad strokes, is a technological frontier that would radically speed up computational power.

In traditional computers, calculations are performed using bits composed of ones and zeroes (computer language). Quantum computers, on the other hand, use quantum bits (qubits) that behave according to quantum mechanics, meaning they can exist in multiple states at once.

This means exponentially faster computing power which, in turn, is the type of horsepower required to power AI technologies. The company that is able to achieve quantum supremacy will be able to create (or license out) AI tech that would be able to achieve all the potential outlined above.

Companies like Nvidia Corporation are waiting for such technological breakthroughs to compound with their own work in the AI space to kickstart this trillion-dollar industry into full gear.

McKinsey & Company says that, by 2020, AI and machine learning could help create up to $2.0 trillion in value in manufacturing and supply chain planning, as well as $2.6 trillion in marketing and sales. (Source: “Roundup Of Machine Learning Forecasts And Market Estimates For 2019,Forbes, March 27, 2019.)

The applications of AI technology are endless. It stands to reason, then, that so too is the potential of AI stocks. The oncoming AI stock rush is inevitable.

Choosing the right stock could mean a difference of millions of dollars in profit. What investors need to decide, then, is which AI stock is best suited to see gains.

Analyst Take

AI stocks are some of the most exciting tech stocks around, without a doubt. How often do you get the chance to be on the ground floor of what will likely become a trillion-dollar industry in the next decade or so?

AI stocks could dominate the world of tomorrow, and hitching one’s wagon to the right company could mean a world of difference to one’s investment portfolio.

That said, Nvidia stock could be in the perfect position to take advantage of the booming AI market.

NVDA stock is looking to make 2020 the year it explodes on the AI market scene. Investors eager to get in on the ground floor of this industry would do well to pay attention to what happens at Nvidia Corporation.