Nvidia has 3 under-the-radar rivals for AI chip supremacy

Who can compete with NVIDIA (NVDA)? Goldman Sachs Asset Management Portfolio Manager Brook Dane spoke with Yahoo Finance Executive Editor Brian Sozzi to talk all things AI chips, and more.

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Video transcript

We have to just at least acknowledge what's happening with NVIDIA.

Now, we just had a valuation discussion.

Maybe I'll impress you here, maybe I won't whatever it is.

Um Nvidia's price to for price to sales ratio 21 times Microsoft's at about 12 times.

I think Apple's at eight times does an NVIDIA which I think impacts a lot of companies in here and by some, by some measure, are they really worth it?

Are they really doing something to warrant a 3.4 trillion market?

So um let me frame this out a little bit for you.

So first of all, I talked earlier about how there's lots of questions we're trying to answer and we're trying to figure out the solutions too.

And um I'd love to pretend like I know exactly where A I is going over the next five years.

But like we're all trying to understand and, and put the pieces together to, to derive investment thesis and, and action on our client accounts.

The the the chip discussion around generative A I is a fascinating one and there's lots of nuance to it.

So first off, you know, first order of magnitude.

We're seeing the initial Capex builds of all these data centers to run um architectures that can, can uh run these models that is massively benefited NVIDIA.

They have this incredible mode because of their software ecosystem.

And because, you know, frankly, they've, they've, they've got that wonderful flywheel of having developers, having a bigger installed base, having good software that then attracts more developers and then attracts more installed base.

And it's, it's performing exceptionally well.

That said like one of our base thinkings in the world is in general, capitalism works and they're making huge margins right now across what they're doing.

You're seeing the big hyper scalar right now, invest heavily in their own Asic chips.

So chips that they're designing themselves to run these workloads within, you know, GCP and aws and Azure to help basically reduce the cost structure and compete with NVIDIA.