ChatGPT by OpenAI likely growth rates, suggesting that it is the fastest growing tool and app in history, registering 100 million users after its launch in November 2022 by January 2023.

Needham considers the technological innovations of OpenAI, the advancement of generative/conversational AI and microsoft corp MSFT Bing AI as broadly transformative and a Productivity, cost reduction and efficiency tool versus a revenue generating tool as it applies to most industries today.

Within US Software, MSFT is the top choice after a comprehensive evaluation of Needham’s potential monetization paths.

Needham determined that MSFT has a path through monetization of OpenAI technology in the MSFT productivity suite and premium GPT-integrated offerings to generate approximately $40 billion in revenue growth for MSFT and an EPS potential of over $2 generate dollars, probably for more than 5 years.

Needham anticipates additional upside from Bing AI and other potential revenue streams not included in the $2+ EPS number.

Nvidia Corp NVDA Graphic Processing Unit (GPU) is the leader in the training market with ~95-100% share. Additionally, while most inference workloads today run on CPUs, these workloads are increasingly running on NVDA GPUs due to superior performance, becoming another growth driver.

In the short term, Needham believes the entry of the H100 and NVDA into the CPU this year will be catalysts.

Needham believes that NVDA’s significant investments in software provide the competitive moat that continues their leadership and the monetization of that software, which has only just begun, provides another catalyst.

NVDA remains Needham’s top pick in US Semifinals due to AI opportunity. Analysts included Sami Badri, Randy Abrams, CFA Chris Caso, Shannon Cross, Stephen Ju and more.

Price promotions: NVDA shares traded 1.95% higher to $231.39 on the last check Thursday. MSFT shares traded 1.48% higher to $249.86.

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