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Nvidia CEO Jensen Huang Says This Is the "Next Wave of AI" -- and He Singled Out 1 Potential Big Winner Other Than Nvidia
If you want to learn where artificial intelligence (AI) could be heading, you'll probably want to pay attention to Nvidia(NASDAQ: NVDA) CEO Jensen Huang. After all, Huang's company is arguably the most important player in the AI world right now. Nvidia's graphics processing units (GPUs) remain the gold standard for powering large-scale AI models.
So what does Huang think about the future of AI? He recently discussed the "next wave of AI" -- and singled out one potential big winner other than Nvidia.
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The next big thing(s) in AI
In Nvidia's third-quarter earnings conference call on Nov. 20, Huang stated, "The next wave of AI are [sic] enterprise AI and industrial AI." He added, "Enterprise AI is in full throttle." What exactly are these next big things for AI that Huang mentioned?
Enterprise AI is the use of AI technologies to help organizations increase productivity, improve customer service, reduce costs, gain competitive advantages, and spur innovation. Alphabet's Google Cloud unit argues, "Enterprise AI goes beyond simple automation. It involves using AI to solve complex business problems that require human-like intelligence, such as understanding customer behavior, optimizing logistics, or detecting fraud."
Industrial AI is similar to Enterprise AI but is specific to manufacturing. It involves using AI technologies in industrial applications such as robotics and supply chain management.
As you might expect since Huang referenced enterprise AI and industrial AI, Nvidia markets products for both areas. The company's AI Enterprise is a cloud platform that supports the development and deployment of AI agents and generative AI applications. Nvidia Omniverse helps customers build, train, and deploy industrial AI models and robotics.
A big enterprise AI winner not named Nvidia
Huang highlighted several customers who are using Nvidia AI Enterprise to develop AI-powered agents and copilots. He also stated, "Consulting leaders like Accenture(NYSE: ACN) and Deloitte are taking Nvidia AI to the world's enterprises."
The Nvidia CEO then expounded on Accenture's initiatives in enterprise AI. He noted that Accenture has launched a new business unit with roughly 30,000 professionals trained in Nvidia's AI technology. This group will help roll out Nvidia AI Enterprise across the world.
Accenture is also using enterprise AI internally. Huang mentioned the consulting company's efforts to use AI agents in marketing campaigns. He said Accenture is reducing manual steps in these campaigns by 25% to 35%.
Generative AI accounted for $3 billion of Accenture's new bookings in fiscal year 2024, which ended Aug. 31, 2024. Accenture CEO Julie Sweet said in the company's fiscal Q4 update that management believes generative AI "is the most transformative technology of the next decade."
Accenture is also a leader in enabling companies to implement industrial AI. The consulting giant is launching a virtual facility robot fleet simulation blueprint that integrates Nvidia's Omniverse, Isaac robot development platform, and Metropolis Internet of Things platform to help manufacturers "build autonomous, robot-operated software-defined factories and facilities."
Is Accenture stock a buy?
At first glance, Accenture's valuation might seem problematic. The stock trades at 28 times forward earnings. Its price-to-earnings-to-growth (PEG) ratio, which is based on five-year growth projections, is a relatively high 2.24.
However, Accenture's opportunities in AI could be larger than these valuation metrics imply. Don't underestimate the help organizations will likely require in implementing enterprise AI and industrial AI. Accenture's strong partnership with Nvidia could give it a significant competitive advantage over the next few years.
I think Huang is correct about the importance of enterprise AI (especially the use of AI agents) and industrial AI. I also believe he's right about Accenture's role in helping bring these technologies to organizations across the world. Accenture could be an ideal picks-and-shovels stock to buy for investors seeking to profit from what Huang views as the next wave of AI.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Keith Speights has positions in Alphabet. The Motley Fool has positions in and recommends Accenture Plc, Alphabet, and Nvidia. The Motley Fool recommends the following options: long January 2025 $290 calls on Accenture Plc and short January 2025 $310 calls on Accenture Plc. The Motley Fool has a disclosure policy.
