Nvidia(US:NVDA)2024-02-27 16:00Investment Rating - The report does not provide a specific investment rating for NVIDIA (NVDA US) [9] Core Views - NVIDIA is the best-performing S&P 500 component in 2023 and 2024 YTD, driven by the rapid rise in demand for generative AI-related accelerator chips [1] - The market may not fully appreciate the long-term benefits of generative AI for NVIDIA, and the company's data center business is expected to maintain strong performance through 2025 [1][12] - NVIDIA's valuation remains at historical lows, with a forward P/E of 35x compared to the historical average of 45x [2] - The company's product iteration is accelerating, further solidifying its competitive position, especially with the upcoming release of H200 and B100 AI data center accelerator chips in 2024 [6][8] Financial Projections - FY1Q25E revenue is projected at $25.18 billion, above the company's guidance of $24 billion and Visible Alpha consensus of $24.41 billion [2][13] - FY25E revenue is forecasted at $113.1 billion, up 86% YoY, with non-GAAP EPS of $25.04, up 93% YoY [2][18] - Data center revenue is expected to reach $96.9 billion in FY25E, up 104% YoY, and $120.3 billion in FY26E, up 24% YoY [21][38] Market Performance - NVIDIA's stock price has risen 58.92% YTD, with a 52-week high of $790.92 and a low of $226.98 [3] - The company's market capitalization stands at $1.97 trillion, with an average daily trading volume of 38.93 million shares [3] Competitive Landscape - NVIDIA's GPGPU + CUDA software approach has a high barrier to entry, offering both computational efficiency and flexibility, while competitors like AMD face challenges with open platform compatibility [6][8] - AMD's MI300 GPU, released in 4Q23, is expected to achieve $3.5 billion in sales in 2024, but NVIDIA is likely to maintain a dominant market share in the AI accelerator chip market [65][67] Industry Trends - Downstream cloud service providers are expected to increase capital expenditures by 25% in 2024, with over $300 billion likely allocated to AI accelerator chips, primarily from NVIDIA [22][45] - Microsoft, Meta, Amazon, and Google are leading the charge in AI infrastructure investments, with Microsoft contributing 140% of the YoY growth in capital expenditures among major cloud providers in 2023 [22][45] Product Roadmap - NVIDIA is set to release the H200 and B100 AI accelerator chips in 2024, with the H200 offering improved memory bandwidth and capacity over the H100, and the B100 expected to double the AI performance of the H200 [59][78] - The H20, a replacement for the H800 in the Chinese market, is priced at $12,000-$15,000, slightly below Huawei's Ascend 910B [60] Valuation and Risks - NVIDIA's current valuation is considered low relative to its historical average, with a forward P/E of 35x compared to the historical average of 45x [2][43] - The primary risk to NVIDIA's stock price is the sustainability of its data center business, but the report remains optimistic about the company's ability to maintain strong performance through 2025 [44]