Nvidia's AI Dominance and Missed Opportunities: Insights from Masayoshi Son and Jensen Huang

SoftBank's Masayoshi Son Says Nvidia Stock Is Undervalued. Here's Another Artificial Intelligence (AI) Stock I Think Is a Better Bargain. | The Motley Fool

Masayoshi Son recently suggested that investors are not pricing in Nvidia's future opportunities in the AI market. In my eyes, the most critical piece of infrastructure powering artificial intelligence (AI) is semiconductors. From storage to memory, quantum computing, machine learning, and a host of other generative AI applications, semiconductors represent the backbone supporting the broader AI thesis. If you've been following chipmakers over the last couple of years, then you will find it no surprise that Nvidia (NVDA 4.89%) has emerged as the most influential company in the AI realm. And yet despite its shares gaining 752% in just the last two years, famed investor Masayoshi Son of SoftBank recently proclaimed that Nvidia stock is undervalued. Son's logic was that the total addressable market (TAM) for generative AI is expected to witness robust growth over the next several years. Not only is this an obvious tailwind for Nvidia, but the company's industry-leading roster of graphics processing units (GPU) architecture separates it from the competition in a considerable way; therefore, Nvidia may actually be able to acquire the majority of incremental market share that Son is projecting. Should this be the case, Nvidia stock looks like a no-brainer. While Son could be correct, I'm not allowing Nvidia's dominance to overshadow other opportunities in the chip space. Below, I'm going to detail why I see Qualcomm (QCOM 0.13%) as an alternative to investing in Nvidia, and one that I think is a better opportunity right now. Although Qualcomm is a semiconductor company, its underlying business is quite different to that of Nvidia. Nvidia specializes in making GPUs that are used for generative AI development. By contrast, Qualcomm's Snapdragon architecture is primarily focused on powering mobile phones or even Internet of Things (IoT) devices. For the company's fiscal year (ended Sept. 29), Qualcomm generated $38.9 billion in revenue -- up just 9% year over year. While this level of growth might seem uninspiring, keep in mind that Qualcomm has spent the last several quarters in turnaround mode -- underscored by cost-cutting efforts and reigniting growth in its core handsets (phone) business. In my eyes, Qualcomm's efforts are starting to bear fruit. While revenue only grew in the low single digits during the first half of fiscal 2024, Qualcomm demonstrated an impressive turnaround in the second half as sales rose by 11% during the third quarter and by 19% in the fourth quarter. On top of that, Qualcomm's net income and earnings per share (EPS) both increased by 40% year over year in fiscal 2024. I'll take mundane revenue growth in exchange for this level of profitability growth any day. And what's even better is how Qualcomm will be allocating some of this newfound profit. As part of its recent earnings report, Qualcomm's management announced that the company's board of directors approved a $15 billion stock buyback program. I like this idea, and I find this move as an enticing way to deploy some of the company's excess cash flow in a way that rewards shareholders. In the chart below, I've benchmarked Qualcomm against a peer set of other semiconductor stocks using the forward price-to-earnings (P/E) multiple. I see the forward P/E as a useful benchmark because it can help indicate how a company's outlook is perceived relative to its peers. With a forward P/E of just 14.3, investors appear to be placing a considerable discount on Qualcomm's growth prospects when compared to many of its cohorts. Fundamentally speaking, the valuation trends illustrated in the chart would suggest that Qualcomm could be seen as an undervalued opportunity among the broader semiconductor stock landscape. When you combine the new $15 billion share repurchase program on top of these trends, I tend to think that Qualcomm's management sees this dynamic and believes the stock is undervalued. While Son's assessment of Nvidia's potential could be accurate, I see Qualcomm stock as a more compelling opportunity right now given its valuation disparity compared to peers. To me, Qualcomm is trading at a bargain and I think the stock is a no-brainer right now for investors with a long-term time horizon.

Billionaire Investor Masayoshi Son Is Already $130 Billion Deep in AI Stocks. Now He Thinks Nvidia Is Undervalued. | The Motley Fool

If you're looking for a growth stock investor to follow, it's hard to find one more prolific than Masayoshi Son, the CEO and largest shareholder in Softbank (OTC: SFTBF), a massive diversified holding company based in Japan. Among Son's best-known investments are Alibaba, Yahoo, Uber, DoorDash, WeWork, and Arm Holdings (ARM -5.59%), in which Softbank owns roughly a 90% stake. That investment in Arm, a chip design company that went public last year, has been one of Softbank's best investments in its history. Softbank took the company private in 2016 for $32 billion, and today that stake is worth roughly $130 billion. The stock has soared since its IPO last September on strong growth from AI-related demand and in the smartphone market. Son, who had also invested in Nvidia (NVDA -3.26%) but regretfully sold his 5% stake in the chip stock back in 2019, now sees more opportunity in the AI sector. Softbank was one of several investors to participate in OpenAI's latest funding round, investing $500 million into the ChatGPT creator as part of a round that values the start-up at $150 billion. Son also made a bold statement on the future of AI at a recent conference. Speaking at the Future Investment Initiative, Son said, "I think Nvidia is undervalued." He went on to explain that bearish estimates predict that artificial general intelligence (AGI) will only displace 5% of GDP 10 years from now, which is equal to $9 trillion based on expectations of GDP growth. According to his thinking, that means that there will be $9 trillion in capital expenditures for those chips and data centers and that the AGI running on that infrastructure would be able to generate $9 trillion in revenue a year at a net profit margin of 50%, meaning it would make $4.5 trillion in profit. Son also said that getting there would require 200 million chips and that it would demand 400 gigawatts, which is more than what the U.S. currently uses in electricity. That might seem farfetched, but most tech revolutions seem that way beforehand. The Softbank chief is known just as much for his failures as for his successes. He was a major investor in WeWork before the global coworking business blew up, and he lost $11.5 billion on that investment. In the dot-com bust, he also lost $77 billion in paper wealth at one point, at the time more money than anybody in history had lost. But Son has made much more than that in his successes. Arm, for example, is up roughly $100 billion from Softbank's investment in 2015, and he made $72 billion on Alibaba, starting from just a $20 million investment. Growth stocks, especially those in emerging technologies, offer high risk and high reward. However, one winner can erase many losers, and one big winner can make you rich. After all, you can only lose 100% of your investment in a stock, but you can make 1,000%, 10,000%, or even more on rare occasions and with enough time. There is no limit to gains. While Nvidia is too big at this point to be a 10-bagger, at least not without a very long time frame, it's worth heeding Son's advice on AI stocks as he also talked up the potential of artificial superintelligence, which would be 10,000 times smarter than a human, many times more powerful than AGI. Son also continues to believe that Arm is a great investment, noting its dominant market share in smartphone and Internet of Things devices, and said it would become an AI-centric company very soon. If Son is right about artificial general intelligence, and the market even approaches the $9 trillion figure he mentioned, Arm and Nvidia will both be big winners, and there will be plenty of others.

Must See: Billionaires Jensen Huang And Masayoshi Son Joke About SoftBank's Past As Nvidia's Largest Shareholder - Before Dumping Its Stake - NVIDIA (NASDAQ:NVDA), SoftBank Group (OTC:SFTBF)

Nvidia CEO Jensen Huang and SoftBank's Masayoshi Son recently shared a few laughs and some bittersweet memories at the AI Summit in Tokyo. At the center of their banter? SoftBank's former role as Nvidia's largest shareholder - and how they decided to let that golden opportunity slip away. Don't Miss: This Adobe-backed AI marketing startup went from a $5 to $85 million valuation working with brands like L'Oréal, Hasbro, and Sweetgreen in just three years - here's how there's a limited time opportunity to invest at $1,000 for only $0.50/share before closing date. The global games market is projected to generate $272B by the end of the year -- for $0.55/share, this VC-backed startup with a 7M+ userbase gives investors easy access to this asset market. In 2019, SoftBank SFTBF sold all of its Nvidia NVDA shares, which comprised about 4.9% of the company. It seemed like a solid move back then: they had invested around $700 million and ended up making $3.3 billion from the sale. But now, Son admits the decision wasn't exactly a home run. Today, those shares would be worth over $150 billion. During their talk, Huang jokingly said, "We can cry together," hugging Son on stage as they remembered what might have been. Son, not missing a beat, added that he had to "tearfully" sell those shares. Huang even shared that Son once offered him financial backing to buy Nvidia outright - something he now wishes he'd taken. "That was a great idea," Huang said, with a hint of regret. Trending: 'Scrolling to UBI': Deloitte's #1 fastest-growing software company allows users to earn money on their phones - invest today with $1,000 for just $0.25/share Huang praised Son for being a visionary who has consistently backed winning innovators like Bill Gates, Jerry Yang and Steve Jobs. Son has a talent for recognizing big opportunities and helping establish major tech moments, from bringing Gates and Jobs to Japan to making Alibaba's success possible in China. Yet, even with all those successes, the missed Nvidia chance still stings. Today, Nvidia is worth $3.6 trillion and is the world's most valuable company, ahead of tech giants like Apple and Microsoft. Its value has skyrocketed thanks to the AI boom, with its chips playing a crucial role in powering AI technologies across the globe. Nvidia's stock has surged 2,768% in the last five years, putting Jensen Huang's net worth at a staggering $127 billion. See Also: Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing -- you can become an investor for $0.80 per share today. SoftBank, meanwhile, remains heavily invested in the future of AI. Son has made it clear that he's not done yet. He recently mentioned that his true purpose might be to bring about artificial superintelligence (ASI) - a form of AI that could be 10,000 times smarter than humans. His belief in the power of AI and its ability to solve global problems, from diseases to natural disasters, keeps driving him forward. Despite the missed opportunity with Nvidia, SoftBank is moving ahead at full throttle. Son and Huang recently announced a partnership to build Japan's most powerful AI supercomputer using Nvidia's latest Blackwell chips. The goal? To establish Japan as a major player in AI, with applications that could transform industries like telecommunications, health care and transportation. Read Next: With over 7.8K investors including Meta, Google, And Amazon Execs -- this AI Startup's valuation has skyrocketed from $5 million to $85 million in just three years. Be an early investor with just $1,000 for only $0.50/share today before the offer closes in 2 weeks. Deloitte's fastest-growing software company partners with Amazon, Walmart & Target - You can still get 4,000 of its pre-IPO shares for just $1,000 Market News and Data brought to you by Benzinga APIs

Nvidia's CEO Reveals The Massive Deal He Missed And Why It Is Today A $3.6 Trillion Regret - NVIDIA (NASDAQ:NVDA), SoftBank Group (OTC:SFTBF)

NVIDIA Corp NVDA CEO Jensen Huang on Wednesday said that he passed on an opportunity to acquire full ownership of the chipmaker, now valued at $3.6 trillion when SoftBank Group's SFTBF SFTBY Masayoshi Son offered financial backing years ago. What Happened: During a candid exchange at Nvidia's AI summit in Tokyo, Huang revealed that Son approached him about a decade ago with an offer to help finance a complete buyout of Nvidia, believing the stock market undervalued the company at the time. "Now I regret not taking you up," Huang told Son during their public conversation. "That was a great idea." The conversation took a lighter turn when Son playfully pretended to cry on Huang's shoulder after discussing SoftBank's early exit from Nvidia investments. "We can cry together," Huang joked. "Could you imagine if today, you were the largest shareholder?" See Also: Cathie Wood Cashes Out On Rocket Lab's 28% Surge in $9M Share Sale But Expands Bet On Flying Cars Why It Matters: Nvidia's remarkable ascent has been fueled by the artificial intelligence boom, with the company's chips playing a crucial role in powering AI technologies. The company's stock has surged nearly 200% this year alone, propelling Huang's net worth to $128 billion and making him the 11th richest person globally, according to the Bloomberg Billionaires Index. The discussion preceded the announcement of a new partnership between Nvidia and SoftBank to develop Japan's most powerful AI supercomputer, marking a significant development in Japan's AI infrastructure expansion. Son, who ranks 133rd on Bloomberg's wealth index with a $15.9 billion fortune, has seen his wealth increase by more than $5 billion this year, though that pales in comparison to what might have been had SoftBank retained its earlier Nvidia investments. Read Next: SoftBank Is In Profit Once Again Thanks To Indian IPOs: What's Next For Masayoshi Son? Image via Shutterstock Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs

Jensen Huang says Softbank's Masayoshi Son once offered to help him buy Nvidia

Nvidia's Jensen Huang, with his trademark black leather jacket, has arguably been the hottest tech CEO in the past year as companies around the world race to acquire the Nvidia chips that are pivotal to powering today's AI revolution. But the picture was a little different just a little under a decade ago. Huang revealed at Nvidia's AI Summit in Tokyo on Wednesday that Masayoshi Son, the Japanese billionaire tech entrepreneur and founder of Softbank, offered to help him buy out Nvidia back then. "Masa said, 'Jensen, the market doesn't understand the value of Nvidia. Your future is incredible'," Huang said on stage at a fireside chat with Son. "'Your journey of suffering will continue for some time, so let me give you the money to buy Nvidia.' He wanted to lend me money to buy Nvidia, all of it. Now I regret not taking it." Both men revealed that the conversation about buying Nvidia occurred a month after Son's Softbank took Arm Holdings, the U.K.-based chip designer, private in a $32 billion deal. Softbank took Arm Holdings public again last year. "We talked about combining those two companies [Nvidia and Arm Holdings]," Huang said. As the founder and CEO of Softbank, a Japanese investment holding firm, Masayoshi Son is known for making big bets. He was an early investor in Jack Ma's Alibaba and was also an early investor in Nvidia. Son once owned 5% in Nvidia but dumped his entire stake more than five years ago when it was worth less than $4 billion. That stake would have been worth around $178 billion today. While Son may not have a stake in Nvidia anymore, the two companies announced collaborations on a series of AI endeavors in Japan. Softbank's telecom unit will receive Nvidia's latest chips, made using the Blackwell design, to build a supercomputer as Son tries to ride the AI boom. Besides the supercomputer, Softbank will also be using Nvidia chips to provide AI services over cellular networks. These networks, known by the industry as artificial intelligence radio access networks, or AI-RAN, are expected to be better suited for applications like autonomous vehicle remote support and robotics control. "We're going to buy a lot of your chips," Son said. Son also said that there's "no handicap" and that the Japanese government is not getting in the way of companies trying to ride the AI revolution. Japan was once a leader in sectors like consumer electronics and even the semiconductor industry, but fell behind through a combination of changing market trends and rise of new market competition. "I think in the last three decades as the software industries flourished in the West and China, Japan could have been more aggressive," Huang said. But in recent years, the Japanese government has tried to reestablish its position in the tech industry. On Monday, the Japanese government said it was pledging some $65 billion in additional support for the country's semiconductor and AI sectors. The money is in addition to the 4 trillion yen ($26 billion) the government has already allocated to bolster Japan's chip industry, which includes an ambitious bet on Rapidus, a chip venture that the government hopes will put Japan back at the forefront of the chip industry.

Why Nvidia's Jensen Huang regrets ignoring advice from Japan's 2nd richest man Son, who championed giants like Gates, Jobs

SoftBank is set to build Japan's most powerful AI supercomputer. It will use Nvidia's new Blackwell design chips. The supercomputer will support various local services. Nvidia CEO Jensen Huang and Softbank founder Masayoshi Son made the announcement. They reminisced about their past dealings. Son had offered to help Huang buy Nvidia. Huang now regrets not taking the offer.In a significant move for Japan's technological landscape, SoftBank Group Corp's telecom division has announced a partnership with Nvidia Corp to develop the nation's most powerful AI-driven supercomputer. This advanced system will leverage Nvidia's latest Blackwell-designed chips, intended to support a wide array of local services. This new supercomputer, to be built using Nvidia's DGX B200 platform, combines high-performing computer processors with AI accelerator chips, promising extensive capabilities for artificial intelligence applications in Japan. This collaboration was unveiled at Nvidia's AI Summit in Tokyo, where Nvidia CEO Jensen Huang and SoftBank's founder Masayoshi Son shared the stage for a fireside chat. During the event, Huang acknowledged Son's long history of identifying and supporting influential technology leaders and innovations over the past several decades. "Softbank has always picked a winner -- Bill Gates, Steve Jobs..." said Huang, emphasizing Son's unique ability to back transformative companies early on. Huang praised Son's role in shaping global tech trends, noting, "Masa is the only entrepreneur... who has selected the winner and partnered with the winner in every single generation." He highlighted Son's key role in bringing iconic figures and firms to Japan, including Microsoft's Bill Gates and Apple's Steve Jobs. Son's investments and partnerships have left a profound mark on Japan's tech sector, including early support for Alibaba, a leading player in China's cloud industry. Reflecting on SoftBank's history with Nvidia, Huang reminded the audience that SoftBank was once Nvidia's largest shareholder, with a 4.9% stake until 2019, valued at approximately $178 billion today. Son's reaction to this reminder, playfully resting his head on Huang's shoulder, drew laughter from the audience. "It's okay. We can cry together. Could you imagine? If today you are the largest shareholder..." said Huang, concluding the moment with a lighthearted embrace. Huang also shared a personal regret about a past business decision. He revealed that Son, foreseeing Nvidia's future potential, had offered him financial backing to acquire the company. "Your journey of suffering will continue for some time because you are inventing this future," Son had told Huang. Son had then proposed, "Let me give you the money to buy Nvidia. All of it." Huang admitted that he now regrets declining Son's offer, calling it "a great idea." Nvidia's recent events in India and Japan underscore its vision of an industrial revolution driven by AI. These initiatives aim to broaden AI applications to national infrastructures and reduce Nvidia's dependency on U.S.-based clients. This collaboration with SoftBank positions Japan to be at the forefront of AI-driven advancements and further cements Nvidia's role in leading global AI deployment.

Softbank once offered Jensen Huang a loan to buy Nvidia entirely -- Nvidia CEO regrets not taking the loan

At Nvidia's AI Summit in Tokyo this week, Jensen Huang, chief executive of Nvidia, and Masayoshi Son, the head of SoftBank, expressed regrets that the former did not privatize Nvidia a decade ago when the latter offered him money to do so. As a result, the two companies have failed to merge and create an AI and supercomputer giant with CPU and GPU prowess, reports Fortune. At the event, the two executives discussed three critical attempts to strengthen ties, from privatization to a potential merger with Arm, which regulators stopped. "Masa said, 'Jensen, the market doesn't understand the value of Nvidia. Your future is incredible," said Huang. "'Your journey of suffering will continue for some time, so let me give you the money to buy Nvidia.' He wanted to lend me money to buy Nvidia, all of it. Now I regret not taking it." Masayoshi Son remembered that this happened one month after he acquired Arm sometime in 2016. Apparently, this is when Huang and Son talked about combining the two companies into a powerhouse that could address virtually everything from smartphones to PCs and from mainstream servers to AI machines and supercomputers. Buying Nvidia stock on the open market in 2016 would be much harder than buying the same stock in 2014 - 2015. According to CompaniesMarketCap.com, the company's capitalization in 2014 was $10.89 billion, grew to $17.73 billion in 2015, and skyrocketed to $57.53 billion in 2016. Jensen Huang also reminded Masayoshi Son that he bought Nvidia stock on the open market after 2016 but sold his shares before Nvidia's stock skyrocketed in 2023 - 2024. Today, Nvidia's market capitalization is $3.606 trillion, making it the most valuable company in the world by market cap. The conversation captures their mixed emotions -- nostalgia for the bold ideas they once entertained and a sense of loss as they see what might have been achieved. Jensen's teasing highlights how Nvidia's explosive growth has made these missed opportunities even more poignant, emphasizing how foresight and timing are crucial in the fast-moving tech industry.