NVIDIA launches Jetson Thor robotics computers for physical AI systems
Investing.com - Signs of monetization in artificial intelligence are emerging, bolstering the case for massive recent investments in the nascent technology, according to analysts at Goldman Sachs in a note issuing a "buy" rating of AI-darling Nvidia (NASDAQ:NVDA).
In a note also starting their of coverage of digital semiconductors and electronic design automation software, the analysts said the AI investment cycle is now in a "state of transition," with over $350 billion in capital expenditures already having been plugged into the infrastructure needed to underpin automation.
"Although monetization has been elusive, we see early signs of incremental revenue and much clearer evidence of cost takeout to justify these investments - and we believe AI CapEx can sustain growth from current levels," the analysts led by James Schneider wrote on Thursday.
They argued that the balance between leading-edge AI model training and lower-cost inference should drive a "barbell" approach to investing in the semiconductor sector, or a strategy that aims to fold in both minimal risk and higher-risk strategies.
In this context, the Goldman analysts backed investments in "performance and software ecosystem leaders," saying the relatively early stage of AI development should translate to a premium for these businesses.
"Commoditization remains some time away, and we think the custom silicon market -- although rapidly ramping -- will remain a minority for now," the analyst said.
Meanwhile, "low-cost leaders" in AI, such as electronic design automation firms, are anticipated to address a rising number of systems and chip designers as well as customers, they argued.
Despite lingering risks from geopolitical tensions over cutting-edge chip exports between the U.S. and China, the analysts unveiled "buy" ratings on a number of companies, including Nvidia, Broadcom (NASDAQ:AVGO), Cadenca, and Synopsis. They have a "neutral" rating of Advanced Micro Devices (NASDAQ:AMD), ARM Holdings (LON:ARM) and Marvell (NASDAQ:MRVL).