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Nvidia Corp (NASDAQ:NVDA) and Advanced Micro Devices, Inc (NASDAQ:AMD) stocks see some redemption on Monday after a selloff Friday.
Last Friday, Nvidia faced its worst session since March 2020, losing over $200 billion of its market value.
Stocks recording windfall gains thanks to the artificial intelligence frenzy, like AMD, also lost close to 6% in stock value.
Investors grew wary of the U.S. Federal Reserve’s rate cuts fueled by retaliatory strikes between Iran and Israel, the Financial Times reports.
Also Read: Intel and AMD hit by China’s move to eliminate foreign tech, raising stakes for US chipmakers
Nvidia’s stock price decline accounted for almost half the 0.9% fall in Wall Street’s S&P 500.
Interestingly, Oppenheimer analyst Rick Schafer noted few companies are positioned to materially raise estimates this earnings season as global macro and demand lags (exAI).
Unsurprisingly, Taiwan Semiconductor Manufacturing Co (NYSE:TSM) and ASML Holding NV (NASDAQ:ASML) recently highlighted robust demand for AI-related fab capacity and tools.
According to the analyst, cloud service provider capital expenditures will likely remain strong and trend to the high end of forecasts. Schafer’s recent Asia checks suggest >40% accelerated server growth this year.
Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) Google Cloud, Microsoft Corp (NASDAQ:MSFT) Microsoft Azure, and Amazon.Com Inc (NASDAQ:AMZN) Amazon Web Services (AWS) feature as the top CSPs. Nvidia and AMD GPU-powered solutions are available globally through all significant CSPs.
As per the analyst, Chip-on-Wafer-on-Substrate (CoWoS) capacity will likely tighten through 2024, though Nvidia GPUs H100 and H200 lead times are now roughly half of the 2023 peak of 40-50 weeks.
PC and handset channel inventory is lean, with the growth tempered by lukewarm demand.
The analyst stated that industrial troughs will likely occur in the second quarter, though the slope of the second-half recovery is uncertain.
Last, according to Schafer, Auto sales will likely soften in 2024, reflecting slowing EV adoption and excess inventory. His top picks include Nvidia.
Data Center AI demand continues to lead. Schafer modeled ~3.2 million Nvidia flagship GPU units this year, though he noted a path to 4 million as supply loosens.
The analyst flagged Nvidia’s B100 launches in the third quarter, with server ramp beginning in the fourth quarter, and AMD’s MI300 is likely 400K units this year. Schafer noted that Nvidia dominates the accelerator market.
Price Actions: NVDA shares traded higher by 2.85% at $783.72 premarket on the last check Monday. AMD shares traded higher by 0.44% at $147.29.
Also Read: Nvidia’s Data Center Dominance and AMD’s Rising Share Foretell Bullish Future: BofA Analyst
Photo via Wikimedia Commons
