Nvidia stock continued its upward trend last week, reflecting investor confidence despite potential short-term challenges in AI hardware shipments.
Shares rose 1% to $136.68 in early trading, following a 3.2% gain. The company’s high-end GB200 NV liquid-cooled rack systems are expected to dominate the AI infrastructure market, but the revenue impact might take some time to materialize.
According to Mizuho analyst Vijay Rakesh, Nvidia’s AI GB200 GPU servers require complex connectivity and power upgrades, leading to potential bottlenecks in the short term.
While January-quarter data center revenue is expected to meet expectations, the April quarter might see slower growth, with projected revenue of $36.7 billion, slightly below the $37.4 billion consensus estimate.
However, Rakesh advises investors to remain patient, as Nvidia’s AI chip sales are projected to surge from May onward, driving a strong second half of 2024. He maintains an Outperform rating on the stock, with a price target of $175.
Looking ahead, Nvidia is poised to capture 44% of the AI server market by 2027, thanks to its cutting-edge hardware and software ecosystem. With premium pricing, the company could generate $260 billion in revenue, securing the majority of the projected $350 billion AI accelerator chip market, according to Mizuho’s estimates.
Meanwhile, other chipmakers showed mixed results:
- Advanced Micro Devices (AMD) saw a 1.4% increase.
- Broadcom (AVGO) dropped 2.3% in morning trading.
Nvidia remains a dominant force in AI computing, with long-term prospects favoring sustained growth despite short-term hurdles.
