Riding Nvidia’s Wave: Other AI Stock Plays, Plus A Closer Look at its Valuation 5/25/23

TechCheck

CNBC

Disruptors, Cnbc, Investing, Tech, Management, Business, Technology, Faang

4.5 • 66 Ratings

🗓️ 25 May 2023

⏱️ 8 minutes

🔗️ Recording | iTunes | RSS

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Summary

Nvidia stock is surging today and nearing a trillion dollar valuation, driven by spiking demand for its AI GPUs. But there may be other ways to play that boom. Taiwan Semi manufactures Nvidia and other big tech companies’ chips, and Softbank-owned Arm helps companies bring AI chip design in-house, cutting out the middleman. The stock is actually cheaper now than it was yesterday, thanks to a “guidance for the ages.”

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0:00.0	Gotta keep an eye on the tech story of the day and that's NVIDIA, the stock
0:05.7	surging nearing a trillion dollar valuation on this spiking demand for its
0:10.5	AI GPUs. Dear Durbosa has more on today's tech check.
0:14.0	Pretty historic day, Dee.
0:16.8	It is an historic day, but you know,
0:18.3	NVIDIA for all the enthusiasm,
0:20.1	it is looking extremely pricey.
0:22.0	So there may be other ways to play this AI boom.
0:24.8	Invidia is a fabulous semiconductor company so that means that it designs the chip but it doesn't actually
0:30.2	manufacture them. T.S.M.C. aka Taiwan Semi, that is the company on the other side of that dynamic.
0:36.4	It makes NVIDIA's advanced AI chips.
0:38.6	It also serves all the other biggest names in tech and AI, all working to design their own artificial intelligence
0:45.0	semiconductors. It's ADRs they are up some 10% more than that today. So
0:49.7	investors are already looking to it as the next beneficiary but its valuation is a whole
0:54.6	lot more reasonable forward PE of 20 times versus invidious 82 Mizujo this morning
1:00.4	writing referring to T.S. M.C. feels like free money. Now another name that could
1:04.6	be an opportunity is Soft Bank-owned Arm, which isn't yet public, but it is looking
1:09.3	to IPO this year. Unlike Invidia, which sells Finnish chips to companies, Arm helps the companies
1:14.9	themselves bring in the AI chip design in-house, allowing them to vertically integrate that technology,
1:21.2	i.e. own more of the process and potentially cut costs by cutting out the
1:25.4	middleman, aka, and video. Apple, Amazon, Meta, Google, Microsoft, they're all working on this
1:31.0	and doing so with arm, and for that reason it is known as the Switzerland
	...

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