Nvidia faces competition from its older products

Nvidia has established itself as a leader in the AI chip market. It generated $130 billion in revenue last year and saw its stock price rise dramatically over the past five years. However, investors are concerned about competition potentially taking market share. Rival companies like Advanced Micro Devices (AMD) offer strong chips at lower prices, which could attract some customers. Additionally, big companies such as Amazon and Meta have created their own lower-cost chips, turning Nvidia's customers into competitors. Nvidia CEO Jensen Huang hinted at the company's biggest rival: itself. Huang's comments during the recent GTC AI conference highlighted the fast pace of Nvidia’s innovation. The company has been releasing new chip architectures frequently, with the latest one, Blackwell, boasting significantly better performance than its predecessor, Hopper. Blackwell's sales have already reached $11 billion in its first market quarter. Huang described himself as Nvidia's "chief revenue destroyer," suggesting that the introduction of new architectures might limit sales of older products. While this could pose a challenge, it's expected that Nvidia's top clients, who are also heavily investing in AI, will want to upgrade to the newest technology. Despite concerns about competitors, Nvidia's position remains strong in the booming AI market. There is enough growth opportunity for other companies without threatening Nvidia's dominance. This outlook suggests that Nvidia continues to be a solid investment in the ongoing AI growth period.