Global X ETFs : Nvidia delivered a strong beat-and-raise as AI visibility continues to grow and Hopper demand remains robust amidst growing competition and supply chain obstacles.
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Ido Caspi, Research Analyst at Global X ETFs
- Nvidia delivered a strong beat-and-raise as AI visibility continues to grow and Hopper demand remains robust amidst growing competition and supply chain obstacles. This is evidenced by the 427% YoY revenue growth Nvidia delivered in its data center segment. The ongoing Hopper demand should help alleviate investor concerns about customers potentially delaying purchases in anticipation of the Blackwell transition.
- Gross margins of 78.4%, up 13.8 percentage points year-over-year, stood out and highlight Nvidia’s continued operational efficiencies and profitability. This increase reflects the pricing advantages Nvidia holds across its chip lineup, even amidst growing competition. We believe Nvidia’s dividend increase signals to investors that they’re serious about continued profitable growth in the quarters ahead and returning value to shareholders as the Blackwell transition plays out.
- Looking ahead, with demand drivers this strong, and with competition years behind, we believe Nvidia can comfortably defend and maintain its market share. Big Tech’s capital expenditure remains exceptionally high given how early we are in the generative AI investment cycle. Despite efforts to explore alternative or in-house chips, their options are limited by supply constraints and the challenge of surpassing Nvidia’s proven performance. Currently, Big Tech should prioritize securing top-tier chips to meet downstream AI demand. Furthermore, most emerging GPU alternatives are benchmarked to Nvidia’s H100 chips rather than its more advanced B200 chips, indicating that Nvidia continues to lead the market with its state-of-the-art technology, setting a high standard for competitors to meet. And Nvidia is also experiencing strong demand outside of hyperscale customers, in areas like automotive, industrial, and a wide range of sovereign customers.
- We also anticipate shortages and bottlenecks in other areas of the semiconductor ecosystem, such as rack space and power, to drive further market share gains for Nvidia. With limited slots for AI processors, the demand for alternatives is diminishing in favor of the highest ROI processor, which is undoubtedly Nvidia.
Source : ETFWorld.co.uk
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