Source: Zhitong Finance
Author: Ma Huomin
$NVIDIA (NVDA.US)$Shares have performed well over the past few years, but Bank of America analyst Vivek Arya said the company's future is brighter because it has accelerated the pace of product launches and strengthened its position relative to competitors. Arya gave Nvidia a “buy” rating, with a target price of $650.
He said that according to Nvidia's updated product roadmap, the company may release chipsets for Arm training and inference, x86 training and inference, AI infrastructure, enterprise and hyperscale AI infrastructure in 2024 and 2025.
Additionally, Arya said that while the roadmap doesn't show manufacturing nodes, Nvidia is likely to be one of the first companies to introduce 3 nm or 2 nm technology into AI accelerators. The smaller nanoprocessors are known as cutting-edge processors and are more advanced than other processors.
Arya said, “Similar to Nvidia's strategy in the gaming sector, Nvidia's products cost between $50 and $1,500. We believe the new data center roadmap disclosure shows that as the pace of launch accelerates, the breadth of products will continue to expand, which will continue to make it more difficult for commercial competitors...” Nvidia's competitors in the data center space include$Advanced Micro Devices (AMD.US)$with$Intel (INTC.US)$.
Although Nvidia and Intel are rivals in the data center market, Arya believes Nvidia could use Intel as a potential foundry partner, using its 18A manufacturing node while still$Taiwan Semiconductor (TSM.US)$As its main foundry.
With the advent of chatbots such as ChatGPT, generative artificial intelligence has become a hot topic in the technology field this year. However, these applications and services require significant computational power to power the large language models used to train them, which Arya says has led to a need for “scale computational optimization.”
Given that Nvidia seems likely to be ahead of the competition, Arya said that in the next three calendar years, Nvidia's revenue from data centers may have room to rise, with estimated values of around $42 billion, $70 billion, and $88 billion, respectively.
Nvidia is scheduled to release its third-quarter earnings report on November 21. Analysts generally expect the company's revenue to reach $15.89 billion and earnings per share of $3.35.
By Friday's close, Nvidia was down 3.16% to $454.61.
editor/tolk