Deep tech state
Nvidia's soaring success this year shows the potential — and profitability — of deep tech. Can Australia take advantage?
At some point earlier this year, a new moniker took hold in the investment community to describe the group of mega-cap tech stocks that have assumed the leadership mantle on Wall Street.
The ‘Magnificent Seven’ is made up of Alphabet (Google), Amazon, Apple, Meta, Microsoft, Nvidia and Tesla. Most of these names were included in the preceding FAANG grouping that was used to describe the stars of the pre-COVID bull market run. The two that were not are Tesla and Nvidia.
Nvidia especially is hot and particularly interesting right now, and not just because it has outperformed everyone else in the seven so far this year (the stock has soared 237% in 2023 and now has a market value comfortably above USD1 trillion).
Unlike everyone else in the club and for that matter, the monikers that came before it, it is not a consumer tech company. Nvidia designs and supplies chips that are proving central to the boom in artificial intelligence. It’s still exposed to the consumer, but its customers are large enterprises — the other six members of the seven have all used its products. After years of investor focus on metrics like daily active user growth, services revenue and traffic acquisition costs, Nvidia is a very different kind of tech behemoth. You could even call it a deep tech mega-cap.
