Goldman Reaffirms Preference for Nvidia (NVDA) in AI Compute Ecosystem

NVIDIA Corporation (NASDAQ:NVDA) is one of the Buzzing AI Stocks Analysts are Watching. On January 20, Goldman Sachs reaffirmed its preference for Broadcom and Nvidia, highlighting that it continues to prefer both names within the compute ecosystem.

The firm developed an “investment cost curve” to compare the economies of different chipmakers’ AI solutions and their competitiveness over time. It is intended to address investor questions about the GPU versus ASIC debate in artificial intelligence computing.

The firm’s analysis indicates that Google/Broadcom’s TPU is rapidly closing the performance gap with Nvidia’s GPU solutions on compute cost performance. The TPU v7 achieves an estimated 70% reduction in cost per token compared to TPU v6, bringing it on par or slightly better than Nvidia’s GB200 NVL72 in absolute cost terms.

Even though competitive pressures exist, Goldman believes Nvidia still has advantages, particularly in its time-to-market and software. Moreover, its CUDA software remains a significant competitive moat for customers.

In comparison, Amazon’s Trainium and AMD solutions have delivered only about 30% cost reduction, lagging behind Nvidia and Google solutions on absolute cost.

NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services.

READ NEXT: 10 AI Stocks Making Waves on Wall Street and 10 AI Stocks on Market Radar

Disclosure: None.