In recent years, the rise of artificial intelligence (AI) technologies has dramatically reshaped various sectors, propelling many companies’ stock prices into the stratosphere. Among the frontrunners in this AI boom are Nvidia and Snowflake, both of which are poised to potentially experience significant growth in their stock values as the demand for AI solutions continues to surge.
The current landscape of global AI spending is evidenced by a forecast from IDC, predicting a robust annual growth rate of 29%, culminating in a staggering market value of $632 billion by 2028. This expansive growth trajectory illustrates the early-stage dynamics of AI adoption, which could result in exceptional opportunities for savvy investors looking at stocks likely to soar.
Nvidia: Championing AI Hardware Growth
Nvidia has positioned itself as a leader in the AI hardware market, primarily due to its innovative data center GPUs derived from the Hopper architecture. The overwhelming demand for its H100 Hopper AI GPUs has previously led to wait times extending up to a year, underscoring the competitive advantage Nvidia holds in this space. Building on its success, the release of the new H200 processors promises to elevate its performance capabilities even further.
As we look to the latter half of the current fiscal year, Nvidia anticipates a significant uptick in shipments of its Hopper-based GPUs. Moreover, excitement is growing surrounding the impending Blackwell chip rollout—Nvidia’s next-generation AI processor. This chipset is currently being sampled by key clients, with production ramping up expectedly in the next quarter. CEO Jensen Huang previously noted that the demand for these Blackwell platforms is “insane,” with major tech players like Microsoft and OpenAI already lining up to utilize them.
Morgan Stanley projects that Nvidia could achieve $200 billion in sales from Blackwell-based server systems in the next year, a figure that, while ambitious, could very well be achievable given Nvidia’s explosive data center revenue growth. In fact, data center revenue tripled in the first half of fiscal 2025, soaring from $14.6 billion to an impressive $49 billion. Continued growth at this trajectory could facilitate Nvidia’s stock performance into new record highs.
Snowflake: Tapping Into AI’s Potential
On the flip side, Snowflake, a pioneer in cloud-based data platforms, has been strategically augmenting its offerings to embrace AI by enhancing its data cloud capabilities. The company is leveraging GPU resources to meet the rising demand for new AI product features. This innovative approach enables customers to harness AI for various applications, giving Snowflake a unique position to thrive in a competitive landscape.
Notably, Snowflake’s AI integration is gaining traction among its customer base, with more than 2,500 clients utilizing its AI capabilities within just one quarter. As the company scales its operations, it currently boasts over 10,000 customers – an impressive foundation for upselling AI services. This strategy is reflected in its net revenue retention rate, which stands at a robust 127%, indicating a growing share of wallet among existing customers.
Despite recent challenges resulting in a decline in stock value, the evolving landscape of AI technologies presents vast opportunities. As Snowflake enhances its AI service offerings, the potential for accelerated revenue growth resurfacing is significant. The explosion of remaining performance obligations (RPO)—which jumped 48% year-over-year—signals that Snowflake’s revenue trajectory is set for an upswing, highlighting promising prospects.
Investment Considerations for Savvy Investors
For those contemplating investment opportunities, Nvidia and Snowflake present contrasting yet compelling narratives. Nvidia’s established leadership in AI hardware and its expected revenue growth from new product launches make it a tantalizing prospect for investors willing to bet on the AI boom. Conversely, Snowflake’s ongoing enhancements in AI capabilities and its strong retention metrics signify a potentially lucrative rebound on the horizon.
Ultimately, the ongoing evolution and integration of artificial intelligence across diverse sectors is likely to be a catalyst for transformative growth. By closely monitoring the developments within these two companies, investors stand to capitalize on the rapid advancements shaping the future of technology and finance.
This burgeoning trend is an exciting arena for investment, where the convergence of technology and market dynamics can lead to exceptional returns. Staying informed and agile in these developments may provide substantial opportunities for growth-minded investors looking to shape their portfolios in an ever-evolving market.