So far in 2023, an investment in Nvidia (NASDAQ:NVDA) has yielded outstanding results. What’s the long-term outlook for NVDA stock, though? If you believe that artificial intelligence (AI) is here to stay, then don’t be too surprised if the Nvidia share price is significantly higher in five years than it is today.
Some folks, including video game fanatics, might only think of Nvidia as a manufacturer of graphics processing units (GPUs). Yet, there’s more to Nvidia in the 2020s, as the company is making a name for itself in the AI hardware market.
In addition, Nvidia is boldly venturing into AI-related software. You just never know what Nvidia might do next, so be prepared for the company to continue innovating in multiple tech markets and providing ongoing value to the shareholders.
AI Supercomputers Enhance the Bull Case for NVDA Stock
Not long ago, OpenAI’s ChatGPT popularized generative AI platforms. However, ChatGPT and other chatbots are typically known to be power-intensive. Nvidia’s A100 chip is designed to address this need, as it delivers the intense computational power that generative AI platforms often require.
Nvidia stock traders should know that the A100 chip isn’t the company’s only foray into AI-compatible hardware, though. The company has also introduced its DGX supercomputers, which are now “running 24/7 at businesses across the world to refine data and process AI.” Moreover, CEO Jensen Huang even went so far as to call Nvidia’s DGX supercomputers “modern AI factories.”
Customers around the globe — in Japan, Ecuador, Sweden and elsewhere — are deploying Nvidia’s DGX H100 supercomputers “like AI factories to manufacture intelligence.” From healthcare to legal research, higher education to digital advertising and beyond, the use cases for Nvidia’s supercomputers continue to grow in 2023.
Nvidia Addresses a Major Issue With Generative AI
AI chatbots are now part of the mainstream culture. However, some might wonder whether these programs are reliable and safe. Indeed, skeptics of generative AI could point to instances of chatbots delivering responses that are inaccurate, inappropriate or even dangerous.
Nvidia is now offering a tool called NeMo Guardrails to address this problem. Jonathan Cohen, Nvidia’s vice president of applied research, describes NeMo Guardrails as an “open source developer tool kit to guide LLM-powered chatbots to be accurate, appropriate, on topic, and secure.”
NeMo Guardrails is designed to prevent the disclosure of confidential personal information. It can also help to reduce the dissemination of fictional/inaccurate statements. Perhaps, NeMo Guardrails will bridge the gap of trust among businesses that are distrustful of generative AI. Consequently, the adoption of NeMo Guardrails could bolster Nvidia’s customer count and top-line results.
So, Where Will Nvidia Stock Be in 5 Years?
Nvidia never ceases to develop best-in-class gaming GPUs. At the same time, the company is creating groundbreaking hardware and software for AI applications. Clearly, Nvidia will continue to push the envelope and that’s exciting for the company’s customers and shareholders.
Nvidia’s leading-edge hardware will be the main driver of NVDA stock over the coming quarters. However, the company’s foray into AI-related software could also boost Nvidia’s revenue.
Therefore, I’m targeting $500 for the Nvidia stock price in five years. That’s an attainable objective, especially if Nvidia maintains its status as a leader in AI-friendly technology.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
