Nvidia unveiled its token business performance for the first time on Thursday, May 10. But Benjamin Lau, chief investment officer of Apriem Advisors, said that NVIDIA still has a bigger chance than mining.
He said: For artificial intelligence and data centers, the demand for NVIDIA chips is strong, and this should drive the company's business development in the near future.
Graphics chip maker Nvidia made its first report on bitcoin mining related business on Thursday. But NVIDIA's real opportunity to change this game of gambling is not in the crowded encrypted mines, but in the vast area of artificial intelligence.
Benjamin Lau, Apriem’s chief investment officer, said that a management company with $500 million is making big bets on Nvidia.
Lau said that NVIDIA's commercial chips for the AI space, applications from the health care to the transportation industry and computer data center, is the future.
"They have a good platform, but there is not much real competitiveness in the mining industry," said Lau of Apriem, which is eager for Nvidia's stock.
NVIDIA has achieved remarkable success in these areas. In the first quarter, its data center business generated $10.1 billion in revenue, an increase of 71% over the same period last year. The company claims that its latest chip sales supply for Tesla has promoted the development of the data center business.
According to reports, sales of data centers are lower than analysts' estimates, which may explain the sell-off of NVIDIA stocks in after-hours trading. In recent transactions, NVIDIA's stock price has fallen by 53 dollars, which is a 3% drop, and finally 251.60 dollars.
However, Lau was very impressed by the performance of NVIDIA's stock during this period and believes that it will continue to promote NVIDIA's overall performance. "AI and data center related things will bring short-term business improvement for NVIDIA." Lau said.
Investors are also optimistic about the company’s automated automotive business, although the industry has recently been in dispute. NVIDIA has been developing chips and other technologies for use in the automotive industry.
After killing a pedestrian in a driverless car in Arizona, NVIDIA announced that it will suspend its autonomous car test. Uber's self-driving car uses only the NVIDIA graphics processor but does not use its autonomous vehicle system.
The Bitcoin business has become a thing of the past, and the driverless car business is the future.
Nvidia's automotive business achieved sales of $145 million in the first quarter, an increase of 4% over the same period last year. Benjamin Lau, Apriem’s chief investment officer, said that the field of driverless cars is still at an early stage of development.
"Therefore, driverless cars do have a promising future," he said, but he also admitted that "the development of unmanned vehicles will have a rough development path."
Encryption algorithm mining is one of industries that Lau is not very optimistic about. For the first time, Nvidia disclosed its token-related sales in its earnings report, which it said reached $289 million in the first quarter.
In recent years, NVIDIA and competitor AMD have developed rapidly in the development trend of tokens. The so-called miners purchase their graphics processors to solve the complex mathematical problems involved in creating new internet currencies.
However, as the price of Bitcoin and other tokens plummets, the cost of the mining industry is also falling, and miners are increasingly relying on ASIC chips designed for specific purposes. NVIDIA itself predicts that its second-quarter sales will decline sharply, which is also consistent with Lau's expectations.
He said: "For the token-related business, it will not make a good development momentum in the future. But it did bring good business development to NVIDIA."
NVIDIA’s stock has grown rapidly in sales and revenue over the past two years. But Lau pointed out: Compared with large chip manufacturers such as Qualcomm and Broadcom, NVIDIA’s sales in the chip area are still relatively small.
"They still have a lot of room for development in this area," he said.