HSBC believes that the market has underestimated the revenue growth brought about by the NVL server architecture and GB200's technical advantages.
“King of chips”$NVIDIA (NVDA.US)$The results surpassed expectations. As of press release, Nvidia's US stock rose more than 9% in early trading.
HSBC pointed out in its latest analysis report that the company's management is also optimistic about future demand expectations, and with the technical advantages of the NVL server architecture and GB200, growth in the 2026 fiscal year is also guaranteed.
Nvidia's revenue for the first quarter reached 26 billion US dollars, higher than market expectations of 24.7 billion US dollars, and gross margin was 78.4%, higher than market expectations of 77.0%.
What's even more surprising is that Nvidia management conveyed strong growth expectations to the market. The company expects second-quarter revenue to reach 28 billion US dollars, higher than analysts' expectations of 27 billion US dollars, mainly due to strong demand for data center chips, but gross margin for the second quarter is expected to drop to 75.5%.
Looking ahead, HSBC believes the risk of product transition has been reduced in the second half of 2024:
As TSMC's production capacity expands, the shortage of the company's major GPU products, the H100 and H200, is expected to improve. We expect independent B100 and GB200 revenue of $15 billion and $4.5 billion, respectively, or total revenue associated with Blackwell to be $19.5 billion in fiscal year 2025, accounting for 19% of total data center revenue.
HSBC believes that the market is still underestimating the impact of the NVL server architecture and the technical advantages of the GB200 platform, which will be the most important driving force for the growth of its FY26e data center:
Given NVL36/72's significant ASP premium, data center revenue is expected to reach $179 billion in fiscal 2026, 38% higher than market expectations of $130 billion. Overall sales and earnings per share (EPS) forecasts for fiscal year 2026 were $19.6 billion and $45.16, respectively, which was 36% and 38% higher than the market consensus forecast of $144.5 billion and $32.66, respectively.
Furthermore, HSBC maintains Nvidia's target price of $1,350, which still has room to rise 42% from its current stock price, and has a target price-earnings ratio (PE) of 30 times.
Editor/Jeffrey