NVIDIA (NVDA), Chosen by Perplexity, Stock Price 'Plummets' Even with CPU Gamble

▲ NVIDIA (NVDA), Artificial Intelligence (AI)/AI Generated Image

NVIDIA's (NVDA) $20 billion CPU revenue gamble gained momentum as Perplexity adopted NVIDIA's new central processing unit, Vera. Although NVIDIA directly entered a market dominated by Intel and AMD, its stock price actually fell.

According to U.S. investment media Barron's on July 8 (local time), AI search startup Perplexity plans to use NVIDIA's Vera CPU. Barron's assessed that NVIDIA has been convincing Wall Street that it can grow standalone CPUs into a new core revenue stream, and Perplexity's adoption brings it one step closer to that goal.

NVIDIA expects to generate $20 billion in revenue from Vera CPUs by the end of this fiscal year. Vera is a CPU that handles a wider range of computational tasks than AI-specific semiconductors, a product with which NVIDIA directly targets the primary markets of Intel (INTC) and AMD.

Perplexity's choice of Vera is based on its performance in AI agent tasks. Nate Kupp, VP of Compute Enterprise & Infrastructure at Perplexity, stated that Vera processed AI agent coding tasks about 1.5 times faster than existing CPUs. He explained that AI agents operate continuously without resting between tasks, similar to humans, requiring different processing performance than traditional computing environments.

Perplexity did not disclose the specific quantity of Vera purchases. NVIDIA previously announced that OpenAI, Anthropic, and Oracle (ORCL) also plan to use its CPUs. As AI companies develop their own semiconductors, NVIDIA is expanding its business beyond GPUs to CPUs.

Despite Perplexity's adoption of Vera, NVIDIA's stock price declined. Barron's evaluated that Perplexity's collaboration supports NVIDIA's strategy to grow standalone CPUs into another large revenue business.

[Article Key Summary]

-Perplexity decided to use NVIDIA's new Vera CPU and confirmed its performance was approximately 1.5 times faster than existing CPUs for AI agent coding tasks.

-NVIDIA expects to generate $20 billion in revenue from Vera CPUs by the end of this fiscal year.

-NVIDIA is entering the CPU market dominated by Intel and AMD with Vera, but its stock price fell despite the news of Perplexity's adoption.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*