Source: Wall Street News
With more than 45 companies in 7 major fields, a global data center ecological industry chain is being formed.
As the boom in artificial intelligence heats up rapidly, data centers around the world have ushered in a new wave of growth.
The latest research report released by Goldman Sachs analyst Aleksandra Gjorgievska's team focuses on this field, pointing out that the AI boom has accelerated the capital expenditure of cloud computing giants and spawned new data center technologies from specialized semiconductors to optimized networks and cooling technology.
The report also lists a series of US stocks related to data center topics, presenting a global data center ecosystem industry chain. Goldman Sachs predicted the future performance of each company in the report.
Compute and store
Nvidia
Goldman Sachs expects that Nvidia still has room to grow in sales of customized AI chips. It is expected that its data center revenue will increase more than 3 times and 2 times in the 2024 and 2025 fiscal years, respectively. Continued investment in general AI infrastructure by customers in the healthcare, financial services, and automotive industries, as well as large cloud service providers, will promote the continued growth of its business.
Goldman Sachs said that Nvidia's upcoming series of new products will not only cover the original AI training market, but also expand into the AI inference and service market. The requirement to perform new high-performance computing tasks may in turn boost the demand for data centers. In the medium to long term, the revenue opportunities brought by autonomous AI may also be quite impressive.
AMD
Goldman Sachs raised AMD's 2024 data center GPU revenue forecast from the previous 4 billion/8 billion US dollars to 4.8 billion/10.5 billion US dollars because the company raised its revenue guidelines due to strong development momentum with many cloud and enterprise customers in artificial intelligence chips.
Goldman Sachs pointed out that AMD is expected to gain more share in the server CPU market in the next few quarters, and this trend will help AMD boost profit margins throughout the 2024 fiscal year.
ARM Holdings
Goldman Sachs believes that although most of ARM's usage revenue comes from smartphone manufacturers, ARM's focus is on energy efficiency, and its technology is becoming an emerging competitor to x86 architectures. The infrastructure sector (including data centers) is expected to grow from 11% in FY2023 to 16% in FY2026.
Intel
Intel's share of the data center computing market has declined from about 83% five years ago to about 20% today, as customers increasingly prefer Nvidia, AMD, and ARM-based chips.
Goldman Sachs believes this trend will continue in 2024, saying that although Intel achieved a continuous double-digit percentage increase in server CPU revenue last quarter, its share of data centers declined again.
Goldman Sachs acknowledged Intel's efforts to catch up, pointing out its AI-focused Gaudi series and two new server processors planned to be launched in 2024, but it has yet to see evidence that the company's data center market share is stabilizing.
TSMC
Goldman Sachs believes that demand for advanced packaging technology (CoOS) and AI will help TSMC achieve strong growth prospects this year.
TSMC recently said it expects AI's contribution to total revenue to increase significantly by 2027. Additionally, Goldman Sachs pointed out that even if TSMC plans to double CoWOS production capacity this year, demand for CoWOS is still growing faster than supply, and it is expected that more AI companies will cooperate with foundries, including TSMC, to ensure the supply of CoWos.
SK Hynix
Hynix expects the next generation product, HBM3E, to bring revenue to SK Hynix starting in the second quarter of 2024 and surpassing HBM3 in the second half of 2024.
Goldman Sachs believes that although suppliers are greatly expanding HBM's production capacity, considering that contracts are usually reached about a year in advance, giving producers sufficient demand visibility, Hynix does not expect there will be an oversupply situation in the market in the medium term.
Micron Technology
Micron aims to generate hundreds of millions of dollars in HBM revenue in the 2024 fiscal year, and eventually gain market share in the HBM market comparable to its competitive position in the overall DRAM market.
Goldman Sachs said Micron is making progress towards this goal.
Samsung
Goldman Sachs expects that the recovery of the memory cycle will drive Samsung to achieve significant profit growth this year. The combined sales volume of the HBM3 and HBM3E products is expected to account for about 90% of HBM's total volume in the second half of 2024.
Ibiden
As a supplier of the highest quality ABF substrates, we will benefit from the growth of AI data centers.
Unimicron Technology
As an ABF substrate supplier, Unimicron Technology is expected to support Nvidia's production of more GPUs.
Network and connectivity
Broadcom
Goldman Sachs is optimistic about Broadcom's ASIC business, which is expected to increase Broadcom's AI business by more than 100% in FY2024, 16% in FY2025, and 13% in FY2026.
Marvell Technology
800G PAM4 optical DSPs and custom computing are expected to drive double-digit growth in data center revenue in fiscal year 2025.
Credo Technology Group
AEC revenue is expected to grow in the second half of fiscal year 2025 with the full launch of the second-largest hyperscale customer in the US (Amazon).
Arista Networks
AI network revenue is expected to reach at least $750 million by 2025.
Cisco Systems
Despite increased engagement with AI customers, the outlook was somewhat affected by the slowdown in corporate spending.
Hewlett Packard Enterprise
It is expected to strengthen its position in the AI data center market through the acquisition of Juniper.
infrastructures
Vertiv Holdings
AI is expected to drive the growth of the global data center market, increasing the growth rate by 300-400 basis points until 2028.
nVent Electric
Its data center racks and cabinets, cable and power management, and cooling solutions are expected to help the company win more business.
Eaton
Data center construction is expected to increase the appeal for reindustrialization in the US.
Shenzhen Envicool Technolog
Focus on precision cooling technology for servers, data centers, and energy storage systems.
Nidec
The data center water cooling systems business is expected to grow rapidly.
MYR Group
As the second-largest electrical contractor in North America, it is expected to benefit from data center expenses.
Servers, storage, and support
Dell
AI server orders grew to $2.9 billion and are expected to grow over the long term.
Super micro computer
As a dedicated vendor of high-performance servers and storage systems, it is expected to benefit from the strong demands of AI cloud service providers.
Flex
Hyperscale data centers are expected to account for more than 10% of their revenue, making a significant contribution to revenue growth.
Jabil Circuit
Data center revenue is expected to account for at least 10%, contributing to profit/FCF growth.
Seagate Technology
The commercialization of HAMR is expected to drive growth in the share of the high-volume market segment.
Foxconn Industrial Internet
It is expected that its broad AI supply chain exposure and shift to cloud service customers will drive profit margin expansion.
Elite material
As a supplier of Nvidia copper-coated pressure-sensitive film, it is expected to benefit from the growth of the AI server market.
Taiwan Union Technology
It is expected to gain more share in the high-end copper-coated pressure-sensitive film market.
GCE
As a PCB supplier with 20% of the global market share, it is expected to benefit from increased demand for higher-generation servers and switches that support AI data center connections.
data center operator
Macquarie Technology Group
It is expected to continue to benefit from increased demand for data centers.
NEXTDC
It is expected to benefit from data center-driven requirements.
GDS Holdings
It is expected to benefit from increased demand for data centers.
VNET Group
It is expected to benefit from data center-driven requirements.
Real estate company
Prologis
It is expected to benefit from increased demand in data centers.
SEGRO
It is expected to benefit from increased demand in data centers. ,
Tritax Big Box
It is expected to benefit from increased demand in data centers.
Merlin Properties Socimi
It is expected to benefit from increased demand in data centers.
CTP
It is expected to benefit from increased demand in data centers.
energy supplier
Southern
The data center is expected to be a potential growth point for commercial demand.
Sempra
Growth in the Texas market is expected to showcase opportunities for data centers and electrification.
American Electric Power
Data centers are expected to drive load demand in Ohio, Texas, and Indiana.
Dominion Energy
Demand driven by data centers is expected to drive infrastructure investment and load growth in Virginia.
E.ON
Data center requirements are expected to support European grid modernization and drive higher capital expenditure and revenue.
Iberdrola
Data center power requirements are expected to help limit revenue fluctuations.
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