Eren Sakarya – Big Money news center
Created Date: January 01, 2025 11:04
With the artificial intelligence boom, US chip manufacturer Nvidia grew by 183 percent in 2024, and the company made history by breaking earnings records. Experts believe that Nvidia will continue its earnings in 2025 with its newly released graphics processing chip Blackwell and spending on cloud computing. However, the high electricity consumption of artificial intelligence data centers and the deficiencies in companies’ revenue streams are among the negativities that the US technology giant will face in 2025.
An artificial intelligence craze officially started in the world when OpenAI company launched its artificial intelligence (AI) chat robot ChatGPT at the end of 2022. Artificial intelligence has entered every aspect of our lives. Artificial intelligence programs are used in every field, from the education sector to human resources, from service to finance sector, from media to science. Home appliances, smart devices and even automobiles used in daily life are now supported by artificial intelligence. In particular, the autonomous driving feature of vehicles is becoming increasingly widespread. The defense industry is among the sectors that use artificial intelligence technology the most.
NVIDIA IS THE STAR OF 2024
Of course, advanced processors and chips are required for artificial intelligence-supported programs. That’s why chip manufacturers have grown considerably in the last two years when this trend has become widespread. Shares of the US technology company Nvidia, known especially for its graphics processing chips, have increased by over 850 percent in 2 years since the beginning of 2023, when the artificial intelligence craze began. While the company grew 183 percent in 2024 alone, its market size reached 3.3 trillion dollars. In fact, in 2024, Nvidia surpassed Apple and became the largest company in the world, albeit for a short time.
DAILY EVALUATION RECORD
The company broke a record by being valued at 330 billion in one day in August, and maintained its title as the company whose value increased the most in one day in history. The previous record belonged to Nvidia with $277 billion, which was broken in February 2024. Nvidia has delivered tremendous financial success in 2024. According to Nvidia’s third quarter financial statements announced at the end of October 2024, the company’s revenues increased by 94 percent to 35 billion dollars, with the impact of the automotive industry.
In light of these developments, the company’s Taiwanese-American CEO Jensen Huang added $79 billion to his wealth in 2024. According to the Bloomberg Billionaires Index, Huang’s fortune increased to $120 billion, making the businessman the 12th richest person in the world.
BLACKWELL SALES AND THE CLOUD SECTOR ARE IMPORTANT
So what awaits Nvidia in 2025? The company’s upcoming Blackwell graphics processing chips may play an important catalyst role. Compared to the previous Hopper chip, Blackwell’s AI can perform training tasks up to four times faster. In addition, these new chips are expected to complete transactions up to 30 times faster with artificial intelligence. Based on Blackwell sales, Nvidia’s quarterly revenues could increase significantly.
In addition, financial institution Morgan Stanley predicts that spending on artificial intelligence-supported cloud computing will increase by 50 percent next year. According to experts, these expenses will play an important role in Nvidia’s growth in 2025.
NVIDIA CAN PASS APPLE
In light of these developments, Nvidia’s 4th quarter financial reports to be published in February are also important. Experts predict that the Company’s revenues will increase by 70 percent to 37.5 billion dollars. However, the status of Blackwell shipments could push this forecast even higher. Trewor Jennevine from The Motley Fool states that it would not be surprising if the shares reached $164 and the company’s value exceeded $4 trillion this year. For this, Nvidia shares need to increase by another 17 percent. According to experts, Nvidia may become the largest company in the world, surpassing Apple, whose value is $ 3.9 trillion. Analysts also predict that the company’s shares may rise to 200-225 dollars in 2025.
THE BIGGEST OBSTACLE FOR THE COMPANY: ELECTRICITY
But of course, not everything may be rosy for Nvidia. While some experts remind that artificial intelligence technology requires a lot of electricity, they predict that electricity production capacity may be insufficient for artificial intelligence in the coming periods.
Electricity needs for AI data centers are expected to more than double by 2030, based on current grid capacity, according to research data from financial giant Barclays on The Street. Barclays estimates that data centers account for 3.5% of US electricity consumption today. The investment firm predicts that this figure could exceed 5.5% in 2027 and 9% in 2030.
TAX MAY BE APPLIED DUE TO HIGH CONSUMPTION
Hedge fund engineer Doug Kaas, “Artificial intelligence With data centers so power-intensive and the AI arms race apace, U.S. electricity supplies are falling short. “Power outages are becoming more common and consumers’ electricity bills are rising,” he said. Kaas also predicted that more natural gas power plants would be built for electricity generation and argued that this would create inflationary pressure by doubling natural gas prices. As a result, he stated that more taxes could be imposed on AI companies due to high electricity consumption.
EMPHASIS ON LACK OF REVENUE FLOW
Moreover, the fund manager claimed that AI companies face a significant lack of revenue streams, while spending billions of dollars. To mitigate this lack of revenue streams, Kaas argued that companies will look to cut costs, which will drive shares lower. That’s why chaos Nvidia He also claimed that its shares could fall by $50 to $75.
Source: bigpara.hurriyet.com.tr
