Nvidia (NASDAQ:NVDA) is accelerating its push into AI chips as it unveiled its new AI chip architecture, “Rubin,” to succeed the “Blackwell” model announced in March. The chip giant’s CEO Jensen Huang introduced Rubin ahead of the COMPUTEX conference in Taipei.
The “Rubin” AI chip architecture announcement comes when the company’s Blackwell model is still in production and expected to be shipped to customers later this year. According to Huang, Nvidia has pledged to release new AI chips annually, shifting from a two-year development cycle. The company’s swift turnaround from the Blackwell to the Rubin architecture in under three months highlights the competitive frenzy in the AI chip market and Nvidia’s efforts to maintain its dominance.
AMD Is Also Rising Up to the AI Challenge
Indeed, AMD is also rising to the challenge (NASDAQ:AMD) and unveiled the Ryzen AI 300 series for next-gen AI laptops. The company is aiming to compete with Intel’s (NASDAQ:INTC) Lunar Lake and Qualcomm’s (NASDAQ:QCOM) Snapdragon X with this launch. Moreover, AMD has partnered with Microsoft, and these chips will power laptops featuring the AI chatbot Copilot.
Additionally, the chip major launched the Ryzen 9000 series for desktops, claiming they are the “fastest consumer PC processors” for gaming and content creation. Both the Ryzen AI 300 and 9000 series are likely to be launched in July.
…But Nvidia Still Dominates the AI Chip Market
Amid the rising competition, Nvidia still dominates the AI chip market and controls between 70% and 95% of the market for AI chips, according to a CNBC report that cited research by Mizuho Securities. AI chips are critical for the development of AI as these chips are used for training and deploying models like OpenAI’s GPT.
Furthermore, the company’s 78% gross margin at the end of the first quarter highlights its pricing power, significantly higher than rival chipmakers Intel and AMD, which reported 41% and 47% margins, respectively.
Is Nvidia a Buy or Sell?
Analysts remain bullish about NVDA stock, with a Strong Buy consensus rating based on 37 Buys and three Holds. This bullish outlook has led to the NVDA stock skyrocketing by more than 100% year-to-date and its market cap has crossed a whopping $1 trillion and currently stands at $2.7 trillion. The average NVDA price target of $1,197.64 implies an upside potential of 9.2% from current levels.
Analysts remain bullish about NVDA stock, with a Strong Buy consensus rating based on 37 Buys and three Holds. This bullish outlook has led to NVDA stock skyrocketing by more than 100% year-to-date, and its market cap has crossed a whopping $1 trillion, currently standing at $2.7 trillion. The average NVDA price target of $1,197.64 implies an upside potential of 9.2% from current levels.
