Nvidia edged up Thursday after four down days in a row. The leading chip maker is still waiting for its moment to retake the limelight when it comes to artificial-intelligence processors.
Nvidia shares closed up 0.8% at $214.25.
The daily move was broadly in line with the wider chip sector but the longer-term picture is a little more concerning. Nvidia stock is up nearly 15% this year so far through Thursday’s close, well behind the 81% gain for the PHLX Semiconductor Index.
Part of the explanation is simply that Nvidia is already widely held and is so large that it is now difficult for even its reliably impressive earnings to move the needle.
However, the major question for Nvidia is whether the lead it built up in artificial-intelligence hardware via its specialty of graphics-processing units (GPUs) will last, as the market shifts from training AI models on GPUs to running them on a wider variety of hardware, including central-processing units (CPUs) and custom chips.
Nvidia has addressed the issue with the introduction of its stand-alone Vera CPUs, which it has estimated could bring in $20 billion in revenue this year and has a total potential market of $200 billion.
The market is still waiting to see how the take up of Nvidia’s CPUs against those of rivals Intel and Advanced Micro Devices. Initial benchmark results published this week by benchmarking company Phoronix were impressive, although a full comparison won’t be available until the Vera units are shipped to commercial partners.
“While the tests were curated by Nvidia at its Santa Clara headquarters, the early data from those tests indicate that Vera is highly competitive compared with AMD’s EPYC and Intel Xeon offerings, at least in the workloads Nvidia is targeting with the chip,” wrote Oppenheimer analyst Rick Schafer in a research note.
Nvidia was a recent Barron’s stock pick when it was trading at around $226.