Nvidia Remains Central to AI Revolution, Says Analyst
Analyst Dan Ives compares the current state of artificial intelligence (AI) to the third inning of a baseball game, suggesting it's still early days for investors. According to Ives, Nvidia remains at the center of the AI revolution with its processors driving the boom.
Ives highlighted CoreWeave and Cisco as 'pieces of the puzzle' for the AI trade. CoreWeave is an AI cloud provider that builds data centers around Nvidia's GPUs and custom infrastructure, renting compute capacity to clients. Cisco sells networking hardware and software connecting servers and clusters within data centers and enterprise networks.
Recent results show spending in the AI build-out spreading from chips into cloud platforms and plumbing moving data. Ives notes this shift from capital expenditures for chips to a monetization phase matches what's seen with Microsoft's Copilot seats, Meta's AI agents for businesses, Palantir's AIP deployments, and other examples.
Ives likes to talk about every $1 of Nvidia spend turning into $8-$10 of total spend across storage, networking, cloud platforms, and software. This shows why the trade has legs, as AI infrastructure budgets are not one-time expenses but ongoing costs for companies building AI factories.