On March 22, DFC Intelligence had the privilege to join a private analyst briefing with Nvidia CEO Jensen Huang.  This was an opportunity to ask Huang detailed questions following his keynote at the Nvidia GTC conference the previous day.

The focus was almost entirely on Nvidia’s future in AI.  The key takeaway from the keynote and briefing was that Nvidia is in the process of its most expansive growth of business model ever.  That expansion is into AI which is hitting an inflection point because of the recent success of ChatGPT.

DFC Intelligence has spent the past few months closely monitoring ChatGPT and we are drinking the Kool-Aid.  AI technology is going to revolutionize all aspects of not only business but day-to-day life.  Nvidia plans to be a leader in providing the technology for this growth.

It is important to understand that AI technology did not spring from out of the blue.  Nvidia has been a leading supplier of technology to AI pioneers for over a decade.  Many AI tools, including ChatGPT, are powered by Nvidia GPUs.

Nvidia announced several AI products and multiple partnerships including with Google, Microsoft, and Oracle to bring Nvidia technology to their cloud services.  Huang noted that they are not a cloud service provider but a cloud within a cloud.  He made an analogy to how they grew their business in PC games as a computer within a computer.  A consumer buys a Dell computer, but they also make sure it comes with an Nvidia GPU.  With AI, the plan is that customers will pick a cloud service provider that has Nvidia technology as a key component.

The growth opportunity for Nvidia is large and investors are jumping in a big way.  Nvidia stock is up 88% since the first of the year.  DFC Intelligence believes that Nvidia’s growth potential is just starting to be realized.  However, Nvidia has grown beyond just a player in the video game market.

As Nvidia expands into multiple areas it is no longer appropriate to include them in the DFC Intelligence Video Game Stock Index.  As of March 22. 2023, we are selling Nvidia at an 88% gain and investing the proceeds in more pure-play video game stocks.