Despite the best efforts of Intel (NASDAQ:INTC) to dominate the AI and 5G markets, I’m prepared to stand behind Intel’s most impressive competitor, Nvidia (NASDAQ:NVDA), and recommend a position in NVDA stock as a bullish wager on an absolute powerhouse in the graphics space.
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Sure, you can buy shares of just about any tech company and profit handsomely — if the trade war is resolved. Note how the Nasdaq Composite leaped when China expressed a “calm” attitude toward trade talks. Yet, there’s no need to buy the entire sector if you’re a stock picker like me; thus, I feel that an allocation in Nvidia stock is a smart move given the current valuation.
AI Developments Will Power NVDA Stock
Shar Narasimhan, a deep-learning specialist at Nvidia, dropped a bombshell of a blog post recently; in it, Narasimhan revealed Nvidia’s latest AI developments and whether you’re a tech-head or not, you can’t deny the spirit of innovation at this company.
Machine learning is based on language models, and Nvidia’s two latest models are called BERT, or Bidirectional Encoder Representations from Transformer, and GPT-2, which stands for Generative Pretrained Transformer 2. These two language models are pushing the boundaries of true natural language processing, which includes the ability of machines to process complex language-understanding tasks and to impart deeper and more-nuanced meaning to language, almost like humans can do.
In terms of sheer numbers, I haven’t seen anything from Intel that can compete with this: BERT is pre-programmed with a data set of 3.3 billion words and is capable of learning many more than that, while Nvidia’s GPT-2 models are pre-formatted with a massive 37-gigabyte data set known as WebText. The use cases for these super-powered conversational AI language models remains to be seen, but I see this type of technology as the future of machine learning, and I’m heartened to discover that Nvidia remains on the forefront as a robust AI innovator.
Ride the 5G Super-highway
If you’re not invested in 5G — the ultra-fast, low-latency wireless communications network that will most likely power everyone’s phone in the near future — you can take a nice starter position in 5G technology with Nvidia stock. To prove that this graphics company is fully dedicated to 5G power, Nvidia has embarked on a joint venture with LGU+ to launch a cloud-hosted gaming service based on the 5G network.
LGU+ is an established mobile carrier in South Korea, and this partnership will enable gamers in the region to use the super-fast, cloud-based game-streaming service Geforce Now as early as September. Whether they choose to use their smartphones, laptops, or PCs, this will mark the first time that video-game fans in South Korea will get to play their favorite games entirely on the 5G platform — and since it’s all in the cloud, there’s no need for large, cumbersome downloads.
Lee Sang Min, an LGU+ spokesperson, is eager to provide the South Korean gaming community with lightning-fast game play and superior graphics. “We will continue to strengthen our competitive edge for 5G technology by providing our customers with new user experiences including augmented reality, virtual reality and gaming.”
It’s a highly promising partnership and perhaps a test case to determine if other regions of the world are ready to adopt 5G gaming on a similarly large scale.
The Takeaway on NVDA Stock
A slowdown in the semiconductor space hasn’t hit NVDA stock, as it has been able to perform above industry expectations. As Zacks’ analyst Daniel Laboe noted, Nvidia produces higher-performing GPUs than Advanced Micro Devices (NASDAQ:AMD), maintain its market share consistently stronger, with the split being around 80/20.
With bleeding-edge AI innovation, 5G early-mover status, and other exciting developments in the pipeline, I’m choosing NVDA stock as not just a graphics power player, but a tech titan that could surpass Intel very soon.
As of this writing, David Moadel did not hold a position in any of the aforementioned securities.
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