Embracing the Future: Nvidia’s Path in Computer Gaming Revolution
An analyst from Piper Sandler, Harsh V. Kumar, has provided an Overweight rating for Nvidia Corp. with a target price of $1,050, considering it a top choice in the large-cap class.
During a recent AI Discovery Tour bus trip, Kumar directly engaged with Nvidia’s management team, allowing him to delve into the company’s current operations and its future prospects.
Contrary to the original article’s quotes, it is noted that despite being on the market for nearly two years, the demand for Nvidia’s Hopper processor remains robust, with supply needing to catch up.
Kumar suggested that the supply-demand imbalance might persist throughout the year, potentially leading to a slight margin increase until the introduction of the Blackwell chip.
Customers are concerned about switching orders from Hopper to Blackwell, fearing even longer wait times due to anticipated supply constraints. Nvidia’s management team has debunked worries regarding power requirements for future data centers, emphasizing that their computational acceleration solutions are significantly more energy-efficient than traditional computing methods.
Strategies are in place to optimize energy demand in future data centers, including leveraging “trapped energy” in specific regions and considering new data centers in countries capable of meeting substantial energy needs.
Regarding customer relationships, Nvidia provides its clients with Total Cost of Ownership data, showcasing benefits without signaling a shift in pricing philosophy with the introduction of the new Blackwell architecture. While striving to maintain competitive prices, gross margins for the Blackwell design are expected to be slightly lower than the company average during the launch period.
Nvidia is currently benefiting from revenues generated by data center products sold to sovereign entities, a factor that is anticipated to significantly contribute to the company’s income soon.
The transition to liquid cooling systems, particularly utilizing the GB200 chip, is another area of innovation, with major cloud service providers committing to adapting GB200, primarily in inference applications.
In terms of valuation, Nvidia’s shares are priced at a premium compared to peer companies, reflecting the company’s continuous leadership and innovation in the GPU market.
Kumar forecasts first-quarter revenue of $24.01 billion and an EPS of $5.41.
Following the insights of industry expert in data centers and AI supply chain, Mizuho analyst Vijay Rakesh highlighted Nvidia as a leading GPU provider for artificial intelligence with robust software support, serving as a top AI accelerator, especially for training purposes.
Nevertheless, he also pinpointed potential challenges associated with Nvidia’s new powerful systems, such as power and cooling solutions, posing significant hurdles for data centers.
Market activities: Nvidia’s NVDA shares dropped by 2.22% to $862.22 in the latest Monday check.
This article has been written based on factual information with a fresh perspective on Nvidia’s advancements in the realm of computer gaming and AI technology. The details have been rephrased to offer a unique viewpoint, while still maintaining the core facts from the original content.
The source of the article is from the blog klikeri.rs