AI Market Growth Fuels Nvidia and ServiceNow Investment Appeal

A recent report highlights the anticipated growth of the AI market, predicting it could reach $826 billion by 2030. This optimism favors leading companies like Nvidia and ServiceNow, which are positioned to benefit from increased demand in AI and enterprise solutions.

Date: 11-09-2024

AI Rating: 8

The report emphasizes the promising growth potential of the artificial intelligence (AI) market, projected to reach $826 billion by 2030. This substantial market growth is likely to enhance the stock prices of key players such as Nvidia and ServiceNow, both well-positioned in this expanding sector.

Nvidia's Performance

Nvidia continues to exhibit strong performance, particularly driven by its revenue from data centers, which surged a remarkable 122% year over year. Despite facing headwinds from reduced consumer spending affecting its gaming segment, the robust growth in the data center sector signifies a promising trend for the company’s earnings.

Notably, Nvidia reported that large cloud service providers contributed nearly half of its data center revenue, underscoring the company’s crucial relationships with industry giants like Amazon, Microsoft, and Alphabet's Google. Furthermore, the mention of a near 80% revenue increase expected in the next quarter suggests a positive outlook for Earnings Per Share (EPS).

ServiceNow's Growth Trajectory

On the other hand, ServiceNow showcases strong revenue growth, maintaining a rate of over 20% per year. The report highlights ServiceNow's success in signing 88 deals exceeding $1 million, marking a significant 26% increase from the previous year. This consistent expansion implies that the firm is likely to see an increase in its Net Income and overall profitability.

Moreover, with rapid adoption of ServiceNow's generative AI platform, which is reportedly its fastest-growing new product, the company's potential for future revenue growth appears substantial. The mention of a total addressable market valued at $275 billion compared to its trailing revenue of $10 billion further exemplifies this opportunity.

Overall Investment Considerations

Both companies demonstrate strong positioning within the AI landscape, supported by impressive revenue growth rates and benefits from rising industry demand. Investors are likely to view these developments favorably, providing a boost to stock prices of Nvidia and ServiceNow in the near term.

Stocks: NASDAQ: NVDA NYSE: NOW NASDAQ: AMZN NASDAQ: MSFT NASDAQ: GOOGL