Nvidia is going to be crushed by the competition over the next two years – but not for the reason you might think

For most of the past 19 months, bulls have been in control on Wall Street. All three major stock indexes have hit multiple record closing highs this year, with the artificial intelligence (AI) being the main catalyst.

The excitement around AI is due to the ability of software and systems to learn over time without human intervention. This machine learning capability is expected to enable AI-driven software and systems to become more efficient at their assigned tasks and to acquire new skills, making the technology useful across most sectors and industries.

Although estimates vary savagely For AI, PwC analysts published a report last year (Evaluate the price) claiming that the technology could add $15.7 trillion to the global economy through increased benefits in production and consumption by 2030.

No company has benefited more from the meteoric rise of artificial intelligence than semiconductor giant Nvidia (NASDAQ: NVDA).

Until recently, Nvidia’s operational execution was virtually flawless.

The reason investors have gravitated toward Nvidia over other AI companies is its hardware. Its H100 graphics processing unit (GPU) has quickly become the standard chip used by companies running generative AI solutions and training large language models (LLMs) in high-computing data centers. Nvidia was responsible for all but 90,000 of the 3.85 million GPUs shipped for use in data centers last year, according to TechInsights.

Additionally, the company’s hardware is in such high demand that the company and its next-generation chips are backlogged. When demand for a good or service outstrips supply, it’s perfectly normal for the price of that good or service to rise. A substantial price increase for Nvidia’s H100 GPU has boosted the company’s adjusted gross margin by 13.7 percentage points over the past five quarters.

CEO Jensen Huang has also overseen a major investment in continued innovation that should help Nvidia maintain its GPU advantage. The company’s next-generation Blackwell chip aims to accelerate capability in six areas, including generative AI, while using less power than the previous chip. Meanwhile, the Rubin platform, which will run on the all-new Vera processor, is expected to ship in 2026.

These catalysts have helped boost Nvidia’s market cap by $2.4 trillion since the start of 2023, translating to a 695% gain for investors as of the close on August 13.

While things seem to have been perfect for Nvidia and its shareholders, I predict things will soon get better. significantly The situation is getting more difficult for Wall Street’s darling artificial intelligence.

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Nvidia Is About to Be Crushed by the Competition, But Probably Not in the Way You Think

All publicly traded companies face challenges and/or competitive pressures. Despite maintaining a near monopoly in AI GPUs for data centers, Nvidia is likely to be crushed by competitive pressure over the next two years.

Some of you might think that I…