On Wednesday, May 22, 2024, Nvidia, a leader in GPU technology and AI innovation, announced another outstanding quarterly earnings report, marking a pivotal moment in the AI sector. This milestone emphasizes the transformative power of AI in reshaping industries worldwide, as companies rapidly integrate AI-driven solutions to enhance productivity, optimize operations, and develop new business models. At Gravette Capital, we’re strategically investing in both private and public AI markets to harness this revolutionary potential.

Spotlight on Seekr

One prime example of our private investment strategy is Seekr, a leading AI company revolutionizing content evaluation and generation. Seekr’s platform leverages advanced AI and machine learning to analyze and generate reliable content at scale. Their proprietary scoring engine ensures that users receive unbiased and credible information, addressing the growing concern of misinformation.

Seekr’s innovative approach, coupled with its robust IP portfolio and strategic partnerships with industry giants like Tony Robbins and Bear Grylls, makes it a formidable player in the AI space. The company’s rapid growth—over 50 million searches since its launch in 2022—demonstrates its vast potential and global impact. For a detailed review of Seekr, see our post: Investing in the Future of Search.

Nvidia: At the Forefront of AI

The demand for GPUs is skyrocketing, and Nvidia is at the heart of this surge. Initially designed for video game graphics acceleration, Nvidia’s chips have become indispensable for AI tasks due to their adaptability. The company foresaw the rising demand for AI and enhanced its GPUs to cater to this sector, developing supportive software to drive further advancements.

Nvidia’s projections for soaring chip sales due to AI interest have consistently been exceeded. In Q1, Nvidia’s revenue tripled to $26 billion, with earnings of $6.12 per share. The company anticipates Q2 revenue of $28 billion, surpassing analysts’ predictions. This phenomenal growth has propelled Nvidia’s market cap to over $2 trillion, outpacing even Alphabet, Google’s parent company.

Nvidia’s H100 processor, crucial for powering AI chatbots like OpenAI’s ChatGPT, is in high demand. These processors, priced between $15,000 to $40,000 each, are central to Nvidia’s success. The company is collaborating with over 100 customers building new data centers, some requiring up to 100,000 GPUs.

In a recent interview, Nvidia CEO Jensen Huang said that the demand for their GPUs remains incredibly strong, driven by businesses eager to deploy AI-driven data centers immediately. Huang emphasized, “People want to deploy these data centers right now. They want to put our GPUs to work right now and start making money and start saving money. And so that demand is just so strong.”

Despite growing competition, Nvidia maintains a unique advantage with its GPUs’ universal availability across major cloud services. This ensures that customers are not restricted to a single provider, thereby strengthening Nvidia’s market position.

Nvidia’s robust growth continues to impress, as evidenced by a 92% stock climb this year and the company’s recent 10-for-1 stock split and 150% dividend increase. Major customers like Amazon, Meta, Microsoft, and Google account for 40% of sales, with Nvidia’s data-center division generating $22.6 billion last quarter alone.

At Gravette Capital, we hold Nvidia (NVDA) in two portfolios:

• In one account, shares purchased in May 2021 are up 584.56%, nearly a 6X return in three years.
• In another, shares purchased in March 2021 are up 726.89%, over 7X return in a little over three years.

This explosive growth and extraordinary 6-7X returns highlight the critical role Nvidia’s technology plays in advancing AI applications and maintaining its leadership position in the tech industry. 

Strategic Focus on AI-Driven Growth

Gravette Capital’s strategic focus on the AI sector reflects our commitment to pioneering innovation and seizing significant growth opportunities. By investing in established leaders like Nvidia and emerging trailblazers like Seekr, we ensure our presence at the cutting edge of technological evolution. As we continue to navigate this dynamic sector, we are dedicated to identifying and supporting the next wave of AI-driven growth, reinforcing our role as forward-thinking investors in a rapidly changing business landscape.