After falling into the realm of fixes, several new developments seem to be fueling the rise of AI specialists.
For today’s trading session, Nvidia (NVDA -1.14%) The stock has officially entered correction territory, down more than 12% from recent highs. It’s on track to erase some of those losses today, rising 4.8%. As of 11:46 a.m. ET Wednesday, the stock was still up 3.4%.
The promotion of the chipmaker and artificial intelligence (AI) expert was prompted by some news that bodes well for Nvidia.
positive development
Cloud service providers are the company’s largest customer to date, accounting for approximately 50% of its data center revenue in the third quarter of fiscal 2025 (ending Oct. 27), according to Chief Financial Officer Colette Kress. occupies .
Investors may have more insight into Microsoft’s acquisitions this year, courtesy of the Financial Times. The publication suggests that Microsoft will “buy twice as many” Nvidia’s Hopper chips than its competitors in 2024.
Citing data compiled by Omdia technology consultants, the report said Microsoft bought 485,000 chips, while the next largest buyer, Meta Platforms, bought 485,000 chips. It is said that there were 224,000 pieces. That suggests rivals may have to buy up to catch up.
Nvidia also announced what it calls its most affordable generative AI supercomputer, the Jetson Orin Nano Super. The company says the compact unit fits in the palm of your hand and offers AI capabilities to “hobbyists and students” for just $249. This is half of the previous generation and further expands the market to less affluent users.
Is Nvidia stock a buy?
While evidence continues to mount that AI adoption continues to take place without limit, some investors have expressed concern that Nvidia is getting ahead of itself. With a price-to-earnings ratio of 53, that perspective is understandable. That said, the company’s stock has traded at a P/E ratio of around 59 times over the past decade, suggesting it’s on sale, at least from a historical perspective.
And in fiscal 2026, which begins in late January, Nvidia plans to sell for roughly 29 times next year’s estimated sales. Considering the company’s growth trajectory, that may be a bargain.
Randi Zuckerberg is a former head of market development and spokesperson at Facebook, sister of Meta Platforms CEO Mark Zuckerberg, and a member of the Motley Fool’s board of directors. Danny Vena has held positions at Meta Platforms, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Meta Platform, Microsoft, and Nvidia. The Motley Fool recommends the following options: A long January 2026 $395 call on Microsoft and a short January 2026 $405 call on Microsoft. The Motley Fool has a disclosure policy.
