In a new market commentary, Mizuho Securities analysts highlighted key takeaways from their call with a data center expert, discussing the anticipated strong outperformance of Nvidia (NASDAQ:NVDA) and its vital role in the AI supply chain.
Analysts said that Nvidia continues to see its demand outpacing supply, particularly with tightness on the H100 and H200 GPUs. The company is slated to launch its next-generation Blackwell platform, including the B100, in September or October, with ramping expected to continue into 2025.
“We believe our speaker noted NVDA CUDA and key software sets it a cut above the rest of the competitive field,” Mizuho wrote.
One of the key takeaways is the priority allocation expected for NVDA’s full rack servers NVL36/72 with GB200s, which could be pivotal for the chipmaker’s data center revenue ramp.
"NVDA full rack servers NVL36/72 with GB200s could potentially receive priority allocations and could be the 'Rolls Royce (LON:RR)' of the Data Center industry with Infiniband connectivity and Key to ramp in NVDA DC revenues," continued Mizuho analysts.
Still, the AI chip giant faces certain challenges, such as the limited pool of experienced engineers needed to install and service these advanced servers and the costs associated with direct liquid cooling installations in data centers, among other things.
Mizuho said AMD (NASDAQ:AMD) also remains a key player in the data center and AI supply chain, with its MI300X capacity sold out for 2024 as it seeks additional supply from TSMC to meet customer demand. Analysts believe that AMD will continue to improve its market position by offering better performance at competitive pricing, similar to its strategy in the compute server and PC markets.
Meanwhile, Intel (NASDAQ:INTC) is expected to ramp up shipments of its Granite Rapids in the first quarter of 2025, although there are concerns about potential delays and competition from AMD. Mizuho's experts see Intel focusing on increasing core count and performance to regain market share in the server market.
Mizuho also highlighted strong pricing trends in the DRAM and HDD/SSD markets, which are expected to continue into the second half of 2024.
“Our call also noted DRAM could see 5-10% price increases into the JunQ, with further increases into 2H24E. We believe HBM content growing 100% y/y into 2025 as GPU density moves from ~90-190GB to 288GB in 2025E,” which is a positive for memory chipmakers such as Micron (NASDAQ:MU).