Buying Nvidia gets you at least five other companies

Welcome to AI Collision 💥,

In today’s collision between AI and our world:

Is Nvidia going to split?
Is Dell a sleeper stock?
Bettlegoose

If that’s enough to get the company splitting, read on…

AI Collision 💥

I just watched the most amazing keynote presentation at CES I’ve ever seen.

I’ve been to CES spanning back a decade now, and by far this was the most impressive, and most mind-blowing.

It was the keynote from Nvidia CEO, Jensen Huang.

Ed Note: I started writing this as I was watching the keynote live on Tuesday.

Now, I will admit I don’t want to come across as too big an Nvidia fanboy here, but going off what I just saw Nvidia may very well be the most important company in the future of civilisation, and also quite possibly the greatest company that’s ever existed.

And I know on Tuesday I raised the question about whether Nvidia would cross the $340 mark in 2025. Thinking about it now, it doesn’t matter, if this is the greatest company that’s ever existed, then talking about their size growing from around $3.6 trillion today to $10 trillion, to $36 trillion…seems moot.

I have no doubt in the next 10 years this will continue to be the biggest, most dominant technology company in the world.

How do I know this? Well no one else is developing AI tech at the speed and scale and complexity that is critical to the rollout of AI.

No one.

Sure there are competitors that will play a roll, that much I’m sure of, and the competitors will deliver tidy returns. By Nvidia is the ship that drags all other forward, and their deep rooted, decade long involvement in cutting edge AI chips and platforms is unrivalled.

So, what is it that has me in a tizz about Nvidia (again)?

Three things…maybe four.

Agentic AI development and the rollout of generative AI.
Autonomous (self-driving) vehicles
Humanoid robotics
(Bonus) the multiverse.

I’ll get to the last one in a moment.

But at his keynote, Huang went into some detail as to what Nvidia is doing with each of these. From the incredible development of the Grace Blackwell NVLink 72 superchip:

To the development of the Nvidia THOR chip for autonomous vehicles and humanoid robots. This chips will be the brains of these technologies. In fact the AI robotics opportunity will be so big that Huang even said it will be the largest technology industry the world has ever seen. And that, “The ChatGPT moment for general robotics is just around the corner.”

To the Nvidia Cosmos platform development which enables AI to generate digital twins of physical, real world environments, then generating infinite possibly multiverse simulations to ensure that AI has the largest most comprehensive, physics based truths to learn from and decide on optimal outcomes.

What that means is that with AI they can learn at infinite scale to do the right thing, because they learn in an Nvidia powered multiverse.

When I said the multiverse might be real a few weeks ago, I wasn’t expecting to be proven right so quickly!

Nvidia say the key to all this are three computers. Of which, they’re developing all three.

1 computer to train the AI.

1 to deploy the AI.

1 to create the digital twin (where the AI goes to practice, the multiverse, to find the optimal outcome).

All this is in production and it is coming this year.

One more thing Huang let loose was a top secret chip and project they’ve been working on. It’s called Project DIGIT and it’s an AI device designed to plug into your PC, Mac, use as a standalone workstation (Linux) and access all of Nvidia’s AI stack in a nice little box no bigger than your hand.

You can see it next to the Mac in the next image:

This is home AI packing a GB10, the smallest Grace Blackwell chip they’ve ever produced. This to me looks like a company that’s expanding, that ingraining their technology in every aspect of our future from industrial robotics and autonomous vehicles, to humanoid home robots and AI computers on the desktop.

But…and here’s something I don’t think many people see coming…

I think if you’re buying Nvidia today, you’re not just buying one company anymore. I think you’re buying at least FIVE companies.

Nvidia AI Datacentres, Nvidia Robotics, Nvidia Drive, Nvidia Home AI and Nvidia Medical.

Nvidia has become so big that I can see the company splitting up into smaller companies (either by choice or by regulatory force). Which means I can see a future where Nvidia today becomes five separate listed Nvidia companies.

Big tech companies split and spin off divisions all the time. We saw it with Hewlett Packard, becoming HP Inc. and Hewlett Packard Enterprise. One for consumer products one for datacentres. Dell split up too into Dell and VMWare, one for consumer and commercial products, VMWare for cloud services. VMWare was not long after bought by Broadcom. GE split up into GE Verona (energy) GE Healthcare and GE Aerospace.

There are many more examples, but you get the idea. It allows these companies to be more nimble and laser focused without the dealings of the broader operation. And frankly, I think Nvidia has become so big that it might have no other choice but to split up.

So if you wonder why I said what I did at the top, and if you’re wondering if there’s still value in a company like Nvidia, that’s why.

This isn’t just GPUs anymore, its much more, and that’s what you’re buying.

Side note: if you want to see Huang explain it all as well, head to the CES Keynote replay below.

AI gone wild 🤪

While I’ve espoused a few good reasons as to why Nvidia is set to be the most important company in the world for the foreseeable future, as mentioned there are competitors, and of those, AMD is by far the closest.

As it’s CES time, AMD are of course releasing new things too. Not at the scale and fervour of Nvidia, but still important developments, and one interesting partnership with Dell that makes us thing, you don’t completely discount what AMD could do in the next few years either.

There were usual announcements around gaming and AI, with new CPUs, GPUs and mobile processors but it was a bunch of announcements around AI PCs that was most interesting.

Of note a partnership with Dell whereby all new Dell commercial PCs, which they will call the Dell, Dell Pro and Dell Pro Max.

The wild thing here is that Dell effectively kills off their popular XPS range of PCs, to rebrand the whole line up…well…like Apple products. Strange one, but they are all now packing AMD Ryzen chips which, is good for AMD and I think this ends up being even better for Dell.

This realignment of Dell products has come under fire, and frankly copying the Apple approach to products is funny to a nerd like me. But I do think the Dell is one of those sleeper device companies. It’s not one you think of when you think “tech” but this is a profitable company trading at a not-so-crazy earnings multiple, that’s seen over 50% stock price growth in 12 months, and over 372% stock price growth over five years, and while not a big dividend, they still pay one out.

Add this tie up with AMD, their work on the Dell AI Factory with Nvidia and you start to see that as “boring” as Dell might seem, they’re arguably a great stock to own long term.

Keep a close eye on Dell, while tech is volatile right now, sometimes the sleeper stocks like Dell are the ones to keep the ship steady.

Boomers & Busters 💰

AI and AI-related stocks moving and shaking up the markets this week. (All performance data below over the rolling week).

man in black suit jacket and black pants figurine

Boom 📈

Predictive Oncology (NASDAQ:POAI) up 63%
iRobot (NASDAQ:IRBT) up 38%
Team Internet Group (LSE:TIG) up 25%

Bust 📉

BigBear.ai (NYSE:BBAI) down 25%
Veritone (NASDAQ:VERI) down 10%
Brainchip (ASX:BRN) down 10%

From the hive mind 🧠

You will hear the term “AI Agent” a lot this year. It’s AI that you can interact with in a specific role or function. Think of it as a digital workforce to do stuff, like humans, but AI and predominately online (at least until physical AI hits the ground, then we’ll be pluggin agents into the robots, and away we go!) Anyway, to get a closer handle on AI agents, Google published this very handy whitepaper that is a great read all about AI agents.
Trump is going at it hard and fast. He’s not even in office yet and already another $20 billion from Emirati investment company DAMAC is coming to build data centres in the US. I expect that’s going to ramp up as Trump looks to usher in America’s golden age of AI.
Urging the Biden administration (yes, he’s still President) to refrain from adding new laws seems comical. The reason is that whatever Biden tries to rush through into law now (like offshore drilling bans) only ends up getting reversed by President Trump’s administration the day he steps into office.

Artificial Polltelligence 🗳️

On Tuesday I asked if Nvidia’s stock price would sail past $340 this year. And it seems that you are indeed as bullish on Nvidia as I am.

Which makes me wonder, if that’s the case I have another question for you…(note: all votes are anonymous, I have no idea who answers what question, I just get the tally and percentage numbers)

This is a number I’m very curious to know, I suspect it may correlate closely with the answer to the first question from Tuesday.