Nvidia has some big news.

Tianfeng International Securities analyst Guo Mingxi's latest release of the industrial chain order information for Nvidia's Blackwell GB200 chip shows that currently Microsoft is the largest GB200 customer globally, with order volume in the fourth quarter of this year surging by 3-4 times, surpassing the total of all other cloud service providers.

Guo Mingxi stated in the new report that the capacity expansion of the Blackwell chip is expected to start in the early fourth quarter of 2024, with estimated shipping volume between 0.15 million to 0.2 million pieces. It is forecasted that the shipping volume in the first quarter of 2025 will significantly increase by 200% to 250%, reaching 0.5 million to 0.55 million pieces.

On the market front, Nvidia's stock price continues to soar, with a year-to-date cumulative increase of up to 186.5%. However, Wall Street remains very optimistic about Nvidia's future outlook. Specifically, Bank of America stated that Nvidia's EPS for the 2025-26 fiscal year will continue to rise by 13% to 20%, and raised Nvidia's target price to $190; Goldman Sachs believes that Nvidia's valuation is close to the median PE of the past three years, and compared to its peers, its historical valuation is relatively low.

Nvidia's Big News

Tianfeng International Securities analyst Guo Mingxi's latest release of the industrial chain order information for Nvidia's Blackwell GB200 chip shows that currently Microsoft is the largest GB200 customer globally, with order volume in the fourth quarter of this year surging by 3-4 times, surpassing the total of all other cloud service providers.

In a new report, Guo Mingxi mentioned that Nvidia's Blackwell chip's capacity expansion is expected to begin in the early fourth quarter of 2024. Taking into account yield rates and testing efficiency, it is forecasted that the shipping volume in the fourth quarter of 2024 will be between 0.15 million to 0.2 million pieces, and the shipping volume in the first quarter of 2025 is expected to significantly increase by 200% to 250%, reaching 0.5 million to 0.55 million pieces.

This means that Nvidia may achieve its sales target of a million units in just a few quarters. Nvidia's founder and CEO, Huang Renxun, stated in a previous interview that the upcoming Blackwell chip has been fully put into production and the demand is 'crazy'.

Currently, Microsoft is the most active customer in purchasing Blackwell GB200. In addition to the originally planned GB200 NVL36 orders for testing in the fourth quarter of 2024, Microsoft recently planned to obtain customized GB200 NVL72 units before entering mass production of the Nvidia DGX GB200 NVL72 (also known as the reference design) in the mid-second quarter of 2025.

In the fourth quarter of 2024, Microsoft's Blackwell GB200 order quantity has surged from the previous 300-500 cabinets (mainly for NVL36) to approximately 1400-1500 cabinets, with about 70% being NVL72, representing a maximum increase of 400%. Subsequent orders will mainly focus on NVL72.

According to the updated industry chain order information from Guo Mingchi, Microsoft has recently discussed capacity expansion (approximately 1.5 to 2 times or more of the original capacity) for the fourth quarter of 2024 with key component suppliers and is preparing for early stocking.

Foxconn and Quanta are responsible for delivering Microsoft's Blackwell systems. According to surveys from both companies, Microsoft's Blackwell GB200 order volume leads far ahead of other cloud service providers. It is said that the company is rapidly expanding its AI computing capabilities.

Microsoft plans to prioritize the deployment of Blackwell GB200 in low-temperature data centers such as in Washington State, USA, Quebec City, Canada, Helsinki, Finland, to proactively mitigate potential impacts due to insufficient time for cooling system optimization.

Orders from other cloud service providers include Amazon's 300-400 cabinet GB200 NVL36 orders in the fourth quarter of 2024, as well as Meta's focus on Ariel rather than Bianca architecture, with order volumes significantly lower than Microsoft.

It is worth mentioning that Microsoft's official Azure account recently posted on social media that the company has obtained AI servers equipped with Nvidia Blackwell GB200 super chips, making it the first company among global cloud service providers to use the Blackwell system.

Guo Mingchi stated that Microsoft's Blackwell GB200 key component suppliers plan to start mass production and shipments in the fourth quarter of 2024, which will promote their supply chain performance earlier than other cloud service providers.

Nvidia is soaring.

On the market front, Nvidia's stock price continues to soar, hitting another record high this week, with a cumulative increase of 178% so far this year. The latest total market value has climbed to $3.39 trillion (approximately 24 trillion yuan).

Despite the amazing increase, several Wall Street institutions remain very optimistic about Nvidia's outlook.

Among them, Bank of America analysts Vivek Arya, Duksan Jang, and others believe that buying Nvidia is 'a once-in-a-lifetime opportunity for a generation,' as Nvidia's valuation is still attractive, with its 2025 PEG ratio (PE ratio / compound annual growth rate of earnings per share) only at 0.6 times, far below the average of 1.9 times for other companies in the 'Magnificent 7' tech giants on the US stock market.

Bank of America continues to be bullish on Nvidia mainly due to the following three driving factors:

1. Recent industry events (Taiwan Semiconductor's performance, AMD AI event, our conferences with Broadcom, Micron Technology, and other companies, the speed of releasing large language models, comments on capital expenditures by top mega-companies, and Nvidia's 'crazy Blake Wilson demand').

2. Nvidia's enterprise partnerships (Accenture, ServiceNow, Oracle, etc.) and software products (NIM services) are undervalued.

3. It has the ability to generate $200 billion in free cash flow (FCF) in the next two years.

Bank of America expects that nvidia's EPS for the fiscal years 2025-2026 will continue to rise by 13% to 20%, and has raised nvidia's target price to $190. By 2027, nvidia's EPS is expected to increase to over five times the original amount, reaching $5.67, at which point the PE ratio will decrease to a more moderate 24 times.

Goldman Sachs also believes that nvidia is currently reasonably priced, with its valuation close to the median PE ratio of the past three years, and compared to its peers, its historical valuation is relatively low.

Goldman Sachs pointed out in its latest report that the launch of Blackwell and capacity ramp-up are not only drivers of recent and medium-term revenue growth, but also a motivation to expand nvidia's competitive advantage.

Goldman Sachs stated that the lead time for Blackwell GB200 products is about 12 months, making its datacenter business highly forward-looking. Considering the ongoing strong demand for AI, nvidia's chip supply will remain tight in the foreseeable future.

Goldman Sachs emphasized that Sovereign AI, autonomous driving cars, and humanoid robots are also important drivers of nvidia's current and future growth in the field of AI.

Goldman Sachs expects that the growth of Blackwell's chip products will continue as planned, contributing revenue of tens of billions of dollars by the first quarter of next year, and further growth is expected beyond April next year.

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