The tech giant reveals cutting-edge AI advancements, a powerful cloud based Omniverse platform, and strategic collaborations in the automotive industry.

This year at the GPU Technology Conference (GTC) 2023, NVIDIA unveiled a series of groundbreaking AI innovations, talked about upgrades to their Omniverse platform, and highlighted new partnerships that promise to revolutionize the world of computing and automotive manufacturing.

AI Breakthroughs and Applications

NVIDIA showcased its first PCIe dual-GPU in years with applications to train the latest generative AI models, GPT4. NVIDIA has been involved with the training function of these models which have the potential to transform many industries, from language processing to visual content creation and even biology. The company also demonstrated AI Foundations, a new set of cloud services that enables the creation of custom language models and generative AI. Partnerships with Getty Images, Shutterstock, and Adobe highlight the potential of these new AI tools in creative fields.

Our first coverage of Nvidia’s AI thesis began nearly five years ago in the analysis “Holding Nvidia Stock Will Pay Off Due to Two Impenetrable Moats” Since then, the stock has returned 436%. More recently, in January, I discussed why Nvidia powering OpenAI and Microsoft is a great way to play this trend in my interview with Real Vision. Watch the Video here.

NVIDIA Omniverse: Unifying Global Industries

The conference spotlighted NVIDIA's Omniverse, a digital twin platform that allows industries to simulate, optimize, and plan their operations in a virtual environment. The platform has already been adopted by major automotive manufacturers like BMW, Toyota, and Mercedes-Benz to optimize their assembly lines, plan operations across multiple factories, and accelerate digitalization.

Collaborations with companies such as Rimac and Lucid Motors further demonstrate the versatility of the Omniverse platform in creating digital stores and facilitating virtual planning sessions for the automotive industry.

I spoke with VP of Omniverse and Development Platform, Richard Kerris, in a candid one-on-one interview last year. You can view the full-length interview here: “How to Value the Metaverse.”

In our conversation, I asked Kerris about CEO Huang’s well-publicized comment that the “Omniverse or Metaverse is going to be a new economy that is larger than our current economy.” – essentially, what I wanted to know is how can the Metaverse grow to this size considering the dominant influence the internet has on the global population?

Here is what Kerris said:

“[The Metaverse] is going to be many times bigger than the web because of what a virtual world can do for business, for education, for medical, for all sorts of things including entertainment; we’ve just begun to scratch the surface of these possibilities […] You’ve probably heard the term digital twin. One example is what it’s going to do to revolutionize the industrial market, design and manufacturing. Well, a digital twin is a true-to-reality twin in synthetic worlds of what happens in the physical world. We are seeing this transform these things because when you can make decisions in that synthetic world before you commit to it in the physical world, you have a lot of cost savings.” –Richard Kerris

New Hardware, Systems, and Cloud Services

NVIDIA unveiled its latest hardware, including the Ada RTX GPUs and the OVX servers, designed to run the Omniverse platform efficiently. The company also introduced new chips, Grace, Grace-Hopper, and BlueField-3, engineered specifically for energy-efficient focused data centers.

The tech giant announced the NVIDIA Omniverse Cloud, a fully managed cloud service in partnership with Microsoft Azure. The Omniverse Cloud will be integrated with Microsoft 365 and Azure IoT Digital Twins services, connecting hundreds of millions of Microsoft 365 and Azure users. This is a key partnership and a remarkable highlight from the event for public investors.

Since our first coverage of Microsoft, the stock has returned 148% compared to Amazon’s 15%. Read my previous coverage on Microsoft here where I discussed in 2018 “How Microsoft Could Overtake Amazon on Cloud Infrastructure” and also “FAANG-Leader Microsoft is Banking on 4 Key Trends.”

NVIDIA DGX AI Supercomputer: A Modern AI Factory

Spearheading the AI revolution, NVIDIA's DGX H100 AI supercomputer provides the processing power needed for mass-scale AI applications. The company expanded its business model with NVIDIA DGX Cloud, partnering with Microsoft Azure, Google GCP, and Oracle OCI to bring AI supercomputing to companies via a browser.

A few months back, I encouraged investors to stay long Nvidia through the crypto mining selloff with an editorial in September “Nvidia is Ready to Rumble with RTX 40 Series and H100 GPUs” – the stock has returned 113% in roughly 6 months and is the number one performing stock in the S&P 500.

The Future of Accelerated Computing

With a focus on energy efficiency, strategic collaborations, and wide-ranging applications, NVIDIA's accelerated computing ecosystem is poised to play a significant role in shaping the future of industries globally. By combining the power of AI, digital twin technology, and strategic partnerships, NVIDIA continues to show that it will push boundaries of what's possible in technology and industry.

This year's GTC demonstrated NVIDIA's commitment to moving industries forward, improving energy efficiency, and driving innovation through AI and advanced computing technologies. As the entire world races toward digitalization, NVIDIA stands at the cutting edge, helping businesses tackle the challenges and opportunities that lie ahead.

The AI thesis is important for the long-term thesis. In the near-term, Nvidia needs to recover the $2.5 billion decline that occurred following Ethereum’s merge to Proof-of-Stake (PoS) last August. I wrote about this in an editorial “Nvidia Stock: Evidence Gaming Has Bottomed and Why It’s Important” with the conclusion “The company’s swift and concise answer to the crypto mining selloff helps illustrate why Nvidia stands apart from its peers – primarily, that its products are superior, end-market demand remains strong, and management has many levers it can pull to quickly reverse a bottom. Since this article was written, the stock has returned 67%

What’s Next for Nvidia

The I/O Fund is an actively managed portfolio. We sent a trim alert last week on Nvidia and took gains. This is a position we have managed for 5 years, building up to 15% allocation and taking gains near the top, while layering in at the bottom. You can learn more about our Research Services here and our Verified Returns here.