No investor-oriented discussion of NVIDIA Corporation (NASDAQ:NVDA) would be complete without comparing or contrasting it with rival Advanced Micro Devices, Inc. (NASDAQ:AMD). Whether you’re talking about processors, graphics cards to be used as actual graphics cars, graphics cards used in “mining” cryptocurrencies, or graphics cards utilized by artificial intelligence applications, each is the other’s biggest threat.
Calling a spade a spade, however, Nvidia has pretty much won or at least tied AMD on all the aforementioned fronts, including the AI front.
Some fans and followers of AMD stock will protest that idea, pointing out that while the field of artificial intelligence has made great strides in recent years, the practical AI applications that tap into the power of graphics cards is still mostly in the theoretical stages. That’s not the case anymore, though, at least not for Nvidia. NVDA stock holders can celebrate not one but two different implementations of real, meaningful artificial intelligence that essentially secure the company’s lead in this race.
Nvidia Already is Waist-Deep Into AI
For any Nvidia shareholders who’ve been wondering what sort of practical (read “marketable”) use you could get out of artificial intelligence, here’s your answer: it can be used by General Electric Company (NYSE:GE) to help identify defective or failing equipment used by its customers, and it can be used by Wal-Mart Stores Inc (NYSE:WMT) to help it better compete against Amazon.com, Inc. (NASDAQ:AMZN).
Earlier this month, Avitas Systems, part of GE Ventures, teamed up with Nvidia to develop robotic drones that perform inspections of equipment on top of power-line poles, along pipelines, and even under water. These drones don’t just fly or drive (or swim) themselves to a spot that’s difficult for humans to get to. This network of drones, sensors and cameras doesn’t just perform tasks though. It can reason things out on its own, determining which equipment is more prone to failure under certain scenarios, and make a decision to monitor a situation more closely. Of course, these electronic “eyes” also see things that can’t be detected by human eyes.
It’s Nvidia’s DGX-1 supercomputer serving as the backbone for Avitas’ creation.
As for Wal-Mart, its battle with Amazon.com has been a long and well-documented one, with Wal-Mart generally on the losing end of it. That may be about to change, however. In late August, the retailer announced it would be building its own cloud-based AI network using Nvidia’s graphics cards. The so-called OneOps cloud will be used not just by Wal-Mart, but by other firms in need of artificial intelligence architecture.
It’s a significant shift for Wal-Mart, which has ironically used Amazon Web Services to meet much of its cloud-computing needs. Although it’s not yet clear exactly how Wal-Mart intends to leverage its new in-house technology to combat the growing dominance of Amazon, one can reasonably assume it will use the platform as a means for better determining what customers want and when they want it. In turn, this artificial intelligence tool will ultimately help Wal-Mart get better at tailor-made marketing.
Bottom Line for Nvidia Stock
Point being, while much of the AI buzz that’s surrounded AMD stock was prodded by what its technology may be able to do in the future, Nvidia is doing real artificial intelligence right now.
None of this is to imply Advanced Micro Devices doesn’t have any practical artificial intelligence hardware in use right now; it does. It’s also not to suggest Nvidia’s artificial intelligence opportunity has been fully realized it hasn’t. It’s simply to underscore the reality that Nvidia is winning the race. That in itself makes NVDA the more potent of the two artificial intelligence plays.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter.