Nvidia stock is on a tear. This ‘next big thing' can drive more gains.
The shares rose 1.3% Thursday, giving the company a market capitalization of $3.89 trillion—just short of the record $3.195 trillion market cap reached by Apple on Dec.26, 2024. The stock's rise will be on pause at least until Monday as U.S. markets are closed Friday for the Fourth of July holiday.
CEO Jensen Huang has frequently touted robots as the next big thing, and last month the company unveiled a new humanoid bot called AEON, which it built in collaboration with Swedish industrial tech company Hexagon.
It isn't just something for science fiction fans—shareholders should take a look at robots, too. Huang said at a conference in Paris last month that humanoid robotics would 'potentially be one of the largest industries ever."
Analysts polled by FactSet are expecting annual revenue for Nvidia's automotive and robotics division, which also includes self-driving cars, to jump to $7.55 billion by the start of the 2030s, up from $1.70 billion last fiscal year. They'll likely start raising those forecasts if it starts looking like Huang's bullish prediction will come true.
There were some signs earlier this year that the rally could peter out, with Huang warning about the U.S. government's 'deeply painful" curbs on semiconductor exports to China, but shares have rebounded since the market got over the worst of its tariff fears. They're now up 19% in 2025, which has helped Nvidia reclaim the title of the world's most valuable company and put it on the brink of a $4 trillion market capitalization.
History suggests the stock will now take a breather: It rises just 4% on average over the third quarter, according to Dow Jones Market Data. The good news for shareholders is that the final three months of the year have tended to be Nvidia's best period, with it rising 23% on average.
The stock is sitting pretty anyway, but a major breakthrough in robotics could make the outlook even better.
Write to George Glover at george.glover@dowjones.com
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Mint
15 minutes ago
- Mint
Xiaomi Founder's Bold EV Bet Is Paying Off Where Apple's Failed
(Bloomberg) -- Lei Jun, founder and chairman of Xiaomi Corp., the only tech company to have successfully diversified into carmaking, couldn't resist. Speaking at a triumphant launch event in Beijing late last month for Xiaomi's second electric vehicle, a long-anticipated SUV, Lei pointedly mentioned Apple Inc., which spent a decade and $10 billion trying to make a car before giving up last year. 'Since Apple stopped developing its car, we've given special care to Apple users,' he said, noting that owners of the American giant's iPhones would be able to seamlessly sync their devices to Xiaomi's vehicles. The not-so-subtle dig was followed by a flex: Xiaomi then said it had received more than 289,000 orders for its new sport utility vehicle within an hour of its announcement, more than its first EV, a sedan launched in March 2024. Xiaomi succeeding where Apple failed has burnished Lei's reputation, made his company one of the most valuable in China and shaken up both the tech and automobile industries. The collapse of Apple's moonshot car program has only underscored the effectiveness of Xiaomi's grounded approach, which took inspiration from proven designs from Tesla Inc. and Porsche Automobil Holding SE while staying true to the affordable ethos that's made it a cult brand for Gen Z consumers. Crucially, it also launched into the most fertile EV ecosystem in the world — China. With state subsidies, existing charging infrastructure and a ready made supply chain, Xiaomi had a structural tailwind Apple lacked. Xiaomi declined to comment for this story. Lei and Xiaomi's 'charisma, brand recognition and ecosystem cannot be underestimated,' Yale Zhang, the managing director of Shanghai-based consultancy Automotive Foresight, said. 'It's a big influence on young consumers who have filled their homes with Xiaomi products. When it comes time to buy an EV, they naturally think of Xiaomi.' But building cars is a far more complex, capital intensive challenge than making phones or rice cookers. It requires mastering safety regulations, global logistics and production at scale, all while competing against legacy automakers with long histories and large model lineups. Any international expansion will also require navigating complex geopolitical landscapes. As one of the first tech giants to actually manufacture a car, Xiaomi is in uncharted territory. Apple's car project, internally dubbed Project Titan, failed in large part because it wasn't just an EV — it was at one point an attempt to leapfrog the auto industry with a fully autonomous, Level 5 self-driving machine. Its goals were lofty and the direction constantly shifting, the result being over a decade of effort with nothing to show. Lei, 55, was comparatively stingy with time and resources and staked his personal reputation on the endeavor, claiming that making cars would be his 'last entrepreneurial project.' Xiaomi's public narrative is that Lei and his team learned by visiting multiple Chinese automakers, including Zhejiang Geely Holding Group Co. and Great Wall Motor Co., and talked to more than 200 industry experts in some 80 meetings. The reality is also that he used Xiaomi's reputation as an innovative consumer behemoth to get close to China's large carmakers and pick off their top talent. Geely and its billionaire founder Li Shufu welcomed Lei to the automaker's research institute in Ningbo in the months leading up to Xiaomi's announcement that it would enter the car business to discuss topics, including potential collaboration. It's Geely lore that Lei added the WeChat contacts of many staff at the institute, including then-director Hu Zhengnan. Hu later joined Shunwei Capital Partners, the investment firm co-founded by Lei. Xiaomi headhunters also courted Geely staff intensely, according to people familiar with the matter. While it's common for talent to move between companies in the same industry, it was unusual to see this level of aggressiveness around recruitment, the people said, asking not to be identified discussing information that's private. Geely didn't respond to a request for comment. Hu, known for his love of the German luxury marque Porsche, was one of the team members credited as being instrumental to developing Xiaomi's EV business, Lei said at the SU7 launch in 2024. Lei added that Hu left his previous employer after his contract ended. Other executives who joined Xiaomi came from companies including BAIC Motor Corp., BMW AG, SAIC-GM-Wuling Automobile Co. — the General Motors Co. joint venture with SAIC Motor Corp. and Wuling Motors Holdings Ltd. — and auto supplier Magna Steyr LLC. Besides assembling top Chinese automaking talent, Lei made a prescient bet on investing in a self-controlled supply chain — insulating Xiaomi's operation from manufacturing vagaries. This came from painful lessons learned in Xiaomi's early smartphone-producing days, when external suppliers would cut off components unpredictably. In 2016, some members of Xiaomi's supply chain team displeased Samsung Electronics Co. representatives and the South Korean firm threatened to halt supply of its industry-leading AMOLED screens. To mend the fractured relationship, Lei flew to Shenzhen to meet with Samsung's China head at the time. The pair drank five bottles of red wine during their dinner meeting, according to a Xiaomi company biography, and Lei also made multiple trips to Samsung's headquarters in South Korea to apologize and negotiate the resumption of supply. Representatives from Samsung declined to comment. After Xiaomi went into the carmaking business, it invested into almost all parts of the EV supply chain, from batteries and chips to air suspension and sensors. It pumped more than $1.6 billion via Shunwei or other Xiaomi-led funds into over 100 supply chain companies between 2021 and 2024, according to data compiled by Chinese analytics firm Zhangtongshe and Bloomberg. The components from some of the companies that Xiaomi invested in have ended up in its cars, such as lidars from Hesai Technology Co. and onboard chargers and voltage converters from Zhejiang EV-Tech Co. With the 10 billion yuan ($1.4 billion) it committed to the first phase of its EV venture, Xiaomi also built its own factory, rather than going down the contract manufacturing route that some Chinese makers, including Nio Inc. and Xpeng Inc., did when they started out. 'Among tech companies that now build electric vehicles, those who previously had hardware products seem to be more successful than those who only had software products or information services,' said Paul Gong, UBS Group AG's head of China autos research. Despite its early success, there are many who argue Xiaomi's one hit car is copied from elsewhere — and that a sole successful vehicle does not a successful auto producer make. Lei's aggressive approach has also raised hackles in China's car industry. Yu Jingmin, vice president of SAIC's passenger car division, reportedly described Xiaomi's approach as 'shameless' in a critique of the SU7 resembling Porsche. The SU7 has been colloquially dubbed 'Porsche Mi' by netizens. SAIC didn't respond to questions about Yu's remarks. Xiaomi's design team, led by former BMW designer Li Tianyuan, has defended the SU7's aesthetics, emphasizing that the choices were driven by aerodynamic efficiency and performance benchmarks. In late March, there was another setback after a fatal accident involving the SU7. The car had its advanced driver assistance technology turned on before the crash, which afterward led to authorities reining in the promotion and deployment of the technology. The usually vocal Lei kept a low profile on social media for more than a month post the March accident. He returned to more active engagement in May with a missive that said this period of time was the most difficult in his career. Fortunately for Xiaomi, its consumer base is sticky. Known as 'Mi Fans,' the loyal customers have played a pivotal role in the company's rise. Xiaomi cultivated this fandom early on by prioritizing user feedback and the grassroots allegiance has helped it build strong brand equity, especially in China. The SU7 has remained a top selling model even after the accident in March. Indeed, dealers have reported that nearly 50% of customers plump for the SU7 without comparing it to other brands. 'A significant number of older consumers are buying the SU7 for their children, indicating that the model has built trust among more conservative buyers thanks to its safety and quality,' said Rosalie Chen, a senior analyst from investment research firm Third Bridge. Xiaomi has set a delivery target of 350,000 units in 2025, up from its previous goal of 300,000, buoyed by demand for the newly launched YU7 and a ramp up in production. The starting prices for the SU7 sedan, at 215,900 yuan ($30,100), and its SUV, at 253,500 yuan, make them competitive alternatives to models like Tesla's Model 3 and Model Y. The EVs are also showing financial promise. Xiaomi posted record revenue for the first quarter this year, driven by car and smartphone sales. Its EV division is expected to turn profitable in the second half of 2025, Lei said in an investor meeting in June. But even if the popularity of Xiaomi's EVs can spring beyond the company's devoted base, production is still on a much more boutique scale. China's top car brand, BYD Co., sold around 4.3 million EVs and hybrids last year, many overseas, while Tesla moved about 1.78 million vehicles globally. Toyota Motor Corp., the world's No. 1 automaker, sold some 10.8 million vehicles and boasts a lineup of approximately 70 different models. Lei doesn't seem to be prioritizing the mass market of below $20,000 yet, which drives significant volume and is where BYD dominates, Automotive Foresight's Zhang said. Without a lineup in that segment, Xiaomi cars will remain niche purchases for middle to higher-income consumers and Xiaomi may face the same risks as Tesla, which is seeing its sales slump exacerbated by a narrow consumer base and limited models. Nonetheless, Lei seems buoyed by Xiaomi's early wins and is now looking at global expansion. Xiaomi will consider selling cars outside China from 2027, he said last week. Success or otherwise, the European Union, the US and Turkey have all slapped tariffs on Chinese EVs, but Xiaomi wants to set up a R&D center in Munich and may test sales starting in European markets such as Germany, Spain and France when the time is right, Chinese media 36Kr reported in April. 'Xiaomi is a latecomer to the auto industry,' Lei admitted on Weibo in June. But, he said, in a market driven by technology and innovation and the rising global influence of China's EV culture, 'there are always opportunities for latecomers.' --With assistance from Vlad Savov, Mark Gurman, Drake Bennett and Jessica Sui. More stories like this are available on
Mint
2 hours ago
- Mint
Samsung Elec Q2 profit likely to drop 39% on weak AI chip sales
Samsung's Q2 profit seen at 6.3 trln won, down from 10.4 trln won prior year Supply of advanced AI chips to Nvidia fell behind targeted schedule, analysts say Uncertainty surrounding U.S. trade policy remains risk SEOUL, July 7 (Reuters) - Samsung Electronics is expected to forecast a 39% plunge in second-quarter operating profit on Tuesday, weighed down by delays in supplying advanced memory chips to artificial intelligence chip leader Nvidia. The world's biggest maker of memory chips is projected to report an April-June operating profit of 6.3 trillion won ($4.62 billion), its lowest income in six quarters and fourth consecutive quarterly decline, according to LSEG SmartEStimate. The prolonged weakness in its financial performance has deepened investor concerns over the South Korean tech giant's ability to catch up with smaller rivals in developing high-bandwidth memory (HBM) chips used in artificial intelligence data centres. Its key rivals, SK Hynix and Micron, have benefited from robust demand for memory chips needed for AI, but Samsung's gains have been subdued as it relies on the China market, where sales of advanced chips have been restricted by the U.S. Its efforts to get the latest version of its HBM chips to Nvidia certified by Nvidia are also moving slowly, analysts said. "HBM revenue likely remained flat in the second quarter, as China sales restrictions persist and Samsung has yet to begin supplying its HBM3E 12-high chips to Nvidia," said Ryu Young-ho, a senior analyst at NH Investment & Securities. He said Samsung's shipments of the new chip to Nvidia are unlikely to be significant this year. Samsung, which expected in March that meaningful progress over its HBM chip could come as early as June, declined to comment on whether its HBM 3E 12-layer chips had passed Nvidia's qualification process. The company, however, has started supplying the chip to AMD, the U.S. firm said in June. Samsung's smartphone sales are likely to remain solid, helped by demand for stock ahead of potential U.S. tariffs on imported smartphones, analysts said. Many of its key businesses including chips, smartphones and home appliances continue to face business uncertainty from various U.S. trade policies including President Donald Trump's proposal for a 25% tariff on non-US-made-smartphones and the July 9 deadline for "reciprocal" tariffs against many of its trading partners. The U.S. is also considering revoking authorisations granted to global chipmakers including Samsung, making it more difficult for them to receive U.S. technology at their plants in China. Shares in Samsung, the worst performing stock among major memory chipmakers this year, have climbed about 19% this year, underperforming a 27.3% rise in the benchmark KOSPI. ($1 = 1,363.3600 won) (Reporting by Heekyong Yang; Editing by Miyoung Kim and Sonali Paul)
Economic Times
6 hours ago
- Economic Times
Trump's tariff threat, China's retaliation leave Apple stuck between a rock and a hard place
First, Apple faced President Donald Trump's threat to slap tariffs on its products manufactured outside the US. And now, China, sensing an opportunity, is moving fast to stymie the iPhone maker's India plans. Foxconn, Apple's largest supplier, has quietly pulled Chinese engineers and technicians from its Indian plants. Over 300 Chinese workers have left Foxconn's iPhone assembly facilities in India in the past two months. Not just the workforce, Beijing is also curbing technology transfers and tightening controls on equipment exports to India and Southeast Asia, Apple's key hubs outside China, Bloomberg reported. This is to protect China's long-term interests in case tariffs come knocking from the West. What this means for Apple Foxconn's move will hurt Apple as it gears up to make the iPhone 17. India already accounts for 20% of global iPhone output and was hoping to scale further. Trump had aimed the tariff gun at India's Southeast Asian peers, and the country was hoping to pick up the slack. This is also significant, as data showed that nearly all the iPhones exported by Foxconn from India went to the US between March and May, far above the 2024 average of 50% and a clear sign of Apple's efforts to bypass high US tariffs imposed on China. But Vietnam, another key Apple manufacturer, has moved faster and struck a deal with Washington that allows duty-free American imports and caps tariffs on Vietnamese goods at 20%, far below Trump's proposed 46%. This is while India waits for its interim trade agreement ahead of the July 9 deadline. India angle India relies on both a skilled workforce and high-end tech from China. So far, the impact has been limited, but experts say it could worsen as India is pinning its hopes on Apple to become a manufacturing powerhouse. However, Union minister for electronics, IT, railways and information & broadcasting, Ashwini Vaishnaw, has said the country plans to develop its own electronics manufacturing abilities and reduce dependence on China. At an ET Roundtable in New Delhi, Vaishnaw said that India is ramping up domestic production in a 'very methodical and sustained way', aiming for a 38% value addition over the next five years. 'De-risking is learning the skills and making it here and developing our own supply chain, which is what we are doing,' he said. China currently accounts for 38% value addition in electronics assembled in India. Vaishnaw said India is working to reduce its dependence on Chinese know-how and will lean on ecosystems in Taiwan, the US, and South Korea, alongside its own talent.
