Strong demand for Nvidia chips

Some people are worrying about Nvidia's high share price, but not me. I spoke to two long-standing Vestact clients yesterday and both were wondering if they should "take some profits". I persuaded them not to.

Their entry prices for Nvidia were $58.01 and $58.75 respectively. These purchases were made back in 2018. The current price is $896 per share, so they both have rather spectacular gains.

My argument is that Nvidia is not expensive, its move upwards is due to the surge in sales of their high-end chips for AI data centres. Their margins are great, and demand is off the charts.

Their new Blackwell chips are streets ahead of anything available from their competitors. They will have 1.4 exaflops of AI performance and 30TB of fast memory, whatever that means.

In related news, OpenAI and Microsoft are planning a $100 billion AI machine learning system, to be called 'Stargate'. As Ben Evans explained yesterday, "$100 billion is roughly the combined annual capex of Google, AWS and Azure last year."

I suspect that most of the spending on this 'Stargate' project will be on chips from Nvidia. Very good, carry on.