24/7 Insights

• Nvidia Corp. (NASDAQ: NVDA) continues to release new chips torrid pace.
• That is what has driven its share price rise, and it will do so in the coming years.

One critical reason the Nvidia Corp. (NASDAQ: NVDA) stock price increased 179% in the past year is that the company continues to release new chips, each more powerful than the next. Just months ago, it announced its new “AI accelerator,” the Blackwell Ultra chip, which will be available in late 2024. It just released plans for a new chip called Rubin, which will be available in 2026. The release schedule of the past year is what has driven its revenue up by triple digits in the previous several quarters.

According to CNBC, Nvidia CEO Jensen Huang “has pledged to release new AI chip models on a ‘one-year rhythm.’” Huang used to say Nvidia planned to launch a chip every two years. That pace is down by half.

What About AMD?

One reason rivals like Advanced Micro Devices Inc. (NASDAQ: AMD) have not posted share increases like Nvidia’s is that they have not matched the torrid pace of new product releases. AMD’s shares are up “only” 42% in the past year. Not to be outdone this time, AMD launched its new chip within hours of Nvidia’s. According to Reuters, “Advanced Micro Devices unveiled its latest artificial intelligence processors on Monday and detailed its plan to develop AI chips over the next two years in a bid to challenge industry leader Nvidia.”

The question for both companies has become whether each chip that is more powerful than the last is what the market needs. Could there be a peak, at least temporarily, in what the market can bear regarding computing power? That query will probably be answered next year as the new AMD and Nvidia chips come online. These sales will be what drives Nvidia’s stock into 2025 and 2026.

This Is How Much Money Nvidia Makes Every Minute

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