Nvidia (NASDAQ:NVDA) has undoubtedly created many millionaires over the past few years. Artificial intelligence and demand for accelerators like the ones the chipmaker makes has driven NVDA stock to record highs. Shares are up 430% over the last three years and have rocketed 2,100% higher over the past five.
That means $50,000 invested in Nvidia at the start of 2020 would be worth $1.1 million today. Yet with the semiconductor’s stock at nearly a $3.4 trillion valuation, the second-largest stock on the market, further extreme melt-ups in its price will seemingly become increasingly difficult.
However, CEO Jensen Huang says the next phase of AI’s growth will be even bigger than the current generative AI opportunity. S&P Global Market Intelligence pegs the gen AI market of chatbots, digital marketing, and content creation at around $25 billion and growing to over $52 billion by 2028.
Huang, though, says agentic AI, or AI that can perceive, reason, plan, and act, will be orders of magnitude larger. He believes it will be a “multi-trillion dollar opportunity.” As Nvidia is already working on being a leader in the space, it is right to ask, can the chipmaker still mint more millionaires in the future?
Agentic AI is like the old personal digital assistants, but on steroids. It can make decisions and act on its own to reach goals. It is similar to a robot that can plan its day, choose what to do next, or solve problems without being told every step. It uses what it knows and learns from experience to decide the best actions to take.
Nvidia has developed several agentic AI solutions. It says agents are the new digital workforce that work for us and with us. The agents can reason about a problem, break the mission down into tasks, and retrieve data or use tools to generate a response. Nvidia NIM is a set of tools, or pre-trained models that run on computers to make AI work faster and easier, like special software helpers.
Because Nvidia GPUs are running in every single cloud, and in all original equipment manufacturers, a cloud-based platform like ServiceNow (NYSE:NOW), that is managing customer digital workflows, IT systems, human resources, and customer service, can deploy NIM to their customers and run the agents where the customers want to run the software.
Layered on top of that is Nvidia’s NeMo framework, which allows companies to create custom AI models for language, vision, and speech, helping developers build, train, and deploy AI easily.
Huang sees agentic AI ushering in the robotics era, which “will be the largest technology industry the world’s ever seen.”
While there are companies like ServiceNow or Salesforce (NYSE:CRM) that could be huge beneficiaries of agentic AI, there are really a limited number of companies that are developing the framework upon which these systems will run.
As noted, Nvidia is one of the leaders, but it’s not alone. Microsoft (NASDAQ:MSFT) is working on AutoGen, an open-source framework for building multi-agent AI systems that can collaborate and execute complex tasks. Similarly, privately-held Hugging Face‘s Transformers Agents offer tools in its ecosystem for agentic AI, focusing on modularity and performance, allowing developers to build and manage AI agents with various large language models.
There are a number of others, including International Business Machine‘s (NYSE:IBM) Granite, LangChain, and even Meta Platforms (NASDAQ:META), which has been exploring AI agent frameworks through MetaGPT.
Because Nvidia is so entrenched into the fabric of the systems that are developing this next-gen AI technology, it arguably has a competitive advantage in the space. Though the other players are pushing boundaries in different ways, Nvidia’s strength lies in its hardware and enterprise software solutions.
Just as generative AI is a big enough field for many players to profit, agentic AI will be exponentially larger, allowing plenty of room for Nvidia to scale even higher. Despite the growth it has already achieved, a good case can be made that over the next decade and beyond, Nvidia will achieve valuations difficult to imagine today. That suggests the chipmaker will still be minting millionaires for years to come.
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