The world of artificial intelligence (AI) has an exciting new development. Two leading companies in the space are teaming up, and both of their stocks are rising. Chipmaker Nvidia (NASDAQ:NVDA) has released a statement confirming that it will be partnering with software producer ServiceNow (NYSE:NOW) to create customized large language models (LLMs) for generative AI technology. Both companies have seen significant growth over the past six months as the AI boom has overtaken markets. Now they are gearing up to ride the wave even further. Markets have reacted very positively to this news, sending both NOW and NVDA stock up. This development could usher in the next AI stock rally of the season as enthusiasm among investors continues to grow.
Do these stocks have further room to run as the partnership develops? Both companies trade at high levels already, but that doesn’t mean they can’t continue making progress. In fact, their work together could help both Nvidia and ServiceNow secure their places at the top of the AI race.
What’s Happening With NVDA Stock
It’s no surprise that NVDA stock is rising today on news of the partnership. It began trending upward as soon as markets opened and as of this writing, is up almost 5% for the day. While NOW stock isn’t performing quite that well, it is still in the green. Despite some volatility, it is currently up 2% and like NVDA, looks primed to continue climbing. The software innovator doesn’t make as many headlines as Nvidia. However, it has also been on a winning streak since the AI boom began, demonstrating mostly steady growth.
Now both companies are poised to rise even more as they prepare to help change the face of generative AI. By using the software and services provided by Nvidia, ServiceNow will be able to develop LLMs and train them on data specifically for its own intelligent platform. ServiceNow already boasts significant AI functionality through its services and products. But now this foray into generative AI will give it new applications for areas such as IT and customer service professionals, quickly strengthening workflow and office productivity through automation. In a statement released by Nvidia, ServiceNow president and COO CJ Desai stated:
“As adoption of generative AI continues to accelerate, organizations are turning to trusted vendors with battle-tested, secure AI capabilities to boost productivity, gain a competitive edge, and keep data and IP secure. Together, NVIDIA and ServiceNow will help drive new levels of automation to fuel productivity and maximize business impact.”
Desai recently noted that the companies are focused on bringing AI technology to enterprise businesses, not providing general-purpose solutions. He used Starbucks (NASDAQ:SBUX) as an example, citing the company’s use of AI to streamline digital ordering at its cafes and correct mistakes.
Why It Matters
It’s no secret that AI is revolutionizing the business world, creating valuable opportunities for investors. As InvestorPlace senior investment analyst Luke Lango notes, companies that create “the best AI-powered platforms in their respective industries,” will leave their competitors far behind. Nvidia is focused on doing exactly that and teaming up with a software leader like ServiceNow is a great plan of action. With this type of innovation-fueled growth, it could easily live up to predictions and become the market’s next trillion-dollar company.
On the date of publication, Samuel O’Brient did not hold (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.
