With Trump's victory and the uncertainty surrounding the US election finally dissipating, investors are turning their attention elsewhere. For example, what impact will this result have on Nvidia, the darling of artificial intelligence (AI)? Is it more profitable or more bearish?
From the perspective of market performance, optimism has prevailed. Since Trump announced his victory last week, Nvidia's stock price has risen again, becoming the first company with a market value exceeding $3.6 trillion.
Eric Jackson, a senior technology investor and founder of hedge fund EMJ Capital, said, "It's difficult to draw a clear line between artificial intelligence or Nvidia and Trump. I think artificial intelligence is infiltrating every corner of the technology field in some interesting ways. But overall, it's clear that Trump is very supportive of growth and low taxes, which will benefit all technology fields, including artificial intelligence
Jackson believes that as Trump may further open up the digital asset market, Nvidia may see stronger demand from the Bitcoin mining industry. In addition, Nvidia can also benefit from loose regulation in the energy industry, allowing large-scale enterprises to build artificial intelligence infrastructure faster.
However, at the same time, he also pointed out that a noteworthy risk is that the United States and China may trigger trade frictions due to tariff issues. Jackson explained that Nvidia not only sells chips in China, but also has important product development talent in China.
But overall, experts say, 'Nvidia will still be that Nvidia'.
Bank of America analyst Vivek Arya said that the company's three chips, Blackwell Ultra, Rubin, and Rubin Ultra, after Blackwell, may perform well. According to Arya's analysis, these products will be launched in the third quarter of 2025.
According to data compiled by the media, analysts generally expect Nvidia's profit growth rate to reach 43% and earnings per share to reach $4.08 by 2025. Jackson believes that this forecast is relatively conservative, and he expects Nvidia's earnings per share to easily reach $5 next year.
Assuming Nvidia's P/E ratio is 40 times instead of the current 37 times, then Nvidia's stock price should be $200, and currently it is $148, "he added. But that's not all, Jackson believes Nvidia's stock is worth at least $250.
Some analysts say it's hard to imagine how "Trump 2.0" will destroy this potential future profitability in 2025, it will only make it "burn stronger and stronger".
Trump is clearly the optimistic foundation for large tech companies. We believe Musk will help solve China's problems so that they do not have a negative impact on the US technology and artificial intelligence revolution, "said Dan Ives, a well-known analyst at Wedbush, a US investment bank." As Lina Khan (may) leave the Federal Trade Commission (FTC), Nvidia will be more proactive in technology mergers and acquisitions
Although Nvidia CEO Huang Renxun has not made any comments on Trump's victory to date, after news of his first victory came out in November 2016, he commented, "I am optimistic about the outcome. Anyway, overall, I prefer a more liberal government. I have confidence in the resilience of these institutions. We will find a way out and a path forward