Analyst timothy.arcuri@ubs.com +1-415-352 5676 Natalia Winkler, CFA Analyst natalia.winkler@ubs.com +1-415-352 4626 ab 15 December 2025 Powered by YES UBS Evidence Lab Global Research Cloud Accelerator Study Blackwell Broadens Out, Pricing Holds Up Blackwell broadens out Given ongoing investor concerns about durability of AI demand, we revisit GPU cloud pricing and availability in collaboration with UBS Evidence Lab (>Access Dataset). We think this data illustrates the AI demand environment in general and t ...

Production Growth - Bitdeer mined 526 bitcoin in November 2025, a 251% increase compared to the same period last year [1] - The production growth is attributed to the deployment of proprietary SEALMINER rigs, with a self-mining hashrate of 45.7 EH/s [1] Future Projections - The company expects to surpass 50 EH/s by the end of the year, joining other public miners with similar capacity [2] - Currently, Bitdeer has 34.3 EH/s of SEALMINER A2 model deployed and 3.3 EH/s in transit, along with 0.6 EH/s of the new A3 model deployed and 2.9 EH/s in transit [2] ASIC Chip Development - Bitdeer's SEAL04-1 chip demonstrated power efficiency of approximately 6-7 J/TH, with mass production targeted for Q1 2026 [3] - The SEAL04 chip's production was delayed, leading to a split in design and rollout into two batches: SEAL04-1 and SEAL-02 [3] High-Performance Computing Division - The high-performance computing division is on track to earn approximately $10 million in annual recurring revenue as of November, up from $8 million in October [4] - Expansion of AI infrastructure includes a new 2 megawatt data center in Malaysia, expected to launch by the end of 2025 [4] Data Center Expansion - The company is evaluating leasing opportunities for data centers in the U.S., including a 13 megawatt site in Wenatchee, Washington, and a 35 megawatt project in Knoxville, Tennessee [5] Setbacks - A localized setback occurred at Bitdeer's site in Massillon, Ohio, due to a fire, postponing the energization of approximately 26 megawatts [6] - The remaining 174 megawatts at the location are scheduled to come online in Q2 2026 [6]

Core Viewpoint - The article discusses the potential release of NVIDIA's H200 in China, analyzing the implications from both the U.S. and Chinese perspectives, focusing on inventory clearance and market dynamics. Group 1: Reasons for U.S. Release - NVIDIA's CEO is advocating for the release of H200 to clear inventory, as the current market is dominated by the B series products, making it difficult to sell H200 in the U.S. [2] - The U.S. data centers are facing power supply issues, and the newer Blackwell architecture is more energy-efficient, leading to a gradual phase-out of older models like H100/H200. [2] - The ideal solution for NVIDIA is to legally sell H200 to China if it cannot be absorbed in the U.S. market. [2] Group 2: China's Attitude - There is a divided opinion in China regarding the release of H200; some believe that domestic AI chips are not yet competitive, while others fear that agreeing to the release could hinder local chip development and give the U.S. leverage. [3][11] - Economically, there seems to be no strong reason for China to ban the import of H200. [4] Group 3: Performance and Market Impact - The performance of H200, particularly in terms of computing power and memory bandwidth, currently exceeds that of domestic AI chips. [5] - Many existing codes are based on the Hopper architecture, making H200 easy to integrate for large companies. [8] - The domestic production capacity for high-end GPUs is not expected to significantly increase until 2027, indicating a continued reliance on foreign technology. [8] Group 4: Implications for Domestic Market - H200 has practical applications for Chinese customers, primarily in training scenarios, while domestic chips are more suited for inference tasks. [12] - The economic benefits of H200 may be limited due to rising memory prices, which could offset any price reductions. [13] - The overall impact of H200 on domestic GPU cards is expected to be minimal, as it does not directly compete with them. [13] Group 5: Market Reactions - The news about H200's potential release has caused market fluctuations, but the actual impact is likely to be limited, with key factors being policy direction, market demand, and funding conditions rather than just technical availability. [14]

Core Viewpoint - The approval of NVIDIA's H200 chip delivery to China is expected to benefit domestic cloud service providers (CSPs) like Tencent, Alibaba, and ByteDance, promoting capital expenditure (Capex) investments and the explosion of AI applications [1][5]. Group 1: H200 Chip Overview - The H200 chip, set to launch in 2024, utilizes TSMC's 4nm process and features six layers of HBM, exceeding the current export control threshold by nearly 10 times in total processing performance (TPP) [2][6]. - In terms of performance, the H200's memory bandwidth price-performance ratio is comparable to the B300, while its FP8 price-performance ratio reaches 70% of the B300 [3][7]. Group 2: Market Implications - The H series remains highly competitive, with most recent cutting-edge models being trained using Hopper chips (e.g., Grok3, Llama4) [4][8]. - The U.S. chip export restrictions are unlikely to hinder the long-term goal of domestic substitution; rather, the H200's entry is expected to enhance China's overall computing power supply [4][8]. - NVIDIA's management indicated that if geopolitical issues are resolved and permissions are granted, quarterly revenues from H200 sales to China could reach between $2 billion and $5 billion. After accounting for a 25% revenue share to the U.S. government, the net income margin for H200 is projected to be around 64% [4][8].

Core Viewpoint - Nvidia's Q3 FY2026 earnings report showcased strong AI demand, with a record revenue increase of $10 billion quarter-over-quarter, indicating that the AI competition is intensifying despite market concerns about an AI bubble [1][2]. Group 1: Financial Performance - Nvidia reported total revenue of $57 billion for Q3, representing a year-over-year growth of 62%, significantly exceeding Wall Street expectations and the company's prior guidance [2]. - The quarter's revenue increase of approximately $10 billion is more than double the total revenue of AMD's data center segment for Q3, which was $4.3 billion [2]. - The GAAP gross margin reached 73.4%, while the non-GAAP gross margin was 73.6%, both surpassing previous guidance, attributed to the increased share of data center business [4]. Group 2: Market Dynamics and Growth Prospects - Nvidia's forward P/E ratio is approximately 38 times, which analysts consider attractive, especially with Q4 revenue guidance of $65 billion, indicating an $8 billion quarter-over-quarter increase [1][7]. - The company has locked in $500 billion in revenue from its Blackwell and Rubin series from early 2025 to the end of 2026, indicating strong future growth potential [5]. - Concerns about an AI bubble were addressed by CEO Jensen Huang, who emphasized the ongoing growth cycle and the significant revenue increases driven by AI applications, such as Meta's GEM model [3]. Group 3: Inventory and Supply Chain - Q3 inventory increased by 32% quarter-over-quarter, and supply commitments rose by 63%, reflecting the company's preparation for future growth, particularly with the upcoming launch of the Rubin GPU [4][5]. - The increase in inventory is seen as a strategic move to mitigate risks associated with the Rubin GPU launch, ensuring adequate supply to meet anticipated demand [5]. Group 4: Competitive Positioning - Nvidia's valuation remains attractive compared to competitors, with its forward P/E ratio being half that of AMD's [7]. - The stock price is currently supported at the $180 level, with a potential drop to $150 representing a forward P/E of 32 times, which analysts view as a compelling buying opportunity [7]. Group 5: Market Concerns - Nvidia's GPU revenue from the Chinese data center market was only $50 million in Q3, aligning with expectations that significant orders would not materialize in this quarter [6]. - The company's stock performance is influenced by broader market trends, with analysts noting that macroeconomic pressures could lead to a decline below current support levels [7][8].

Core Viewpoint - Nvidia's Q3 fiscal year 2026 results demonstrate strong AI demand, with a record revenue increase of $10 billion quarter-over-quarter, indicating that the AI competition is intensifying despite market concerns about an AI bubble [1][4]. Group 1: Financial Performance - Nvidia reported total revenue of $57 billion for Q3, a year-over-year increase of 62%, significantly surpassing Wall Street expectations and the company's prior guidance [2][4]. - The company's GAAP gross margin reached 73.4%, while the non-GAAP gross margin was 73.6%, both exceeding previous guidance [7]. - The inventory increased by 32% quarter-over-quarter, and supply commitments rose by 63%, reflecting preparations for future growth, particularly with the upcoming launch of the Rubin GPU [8]. Group 2: Market Position and Growth Potential - Nvidia's forward P/E ratio is approximately 38 times, which is considered attractive compared to its main competitor AMD, which has a P/E ratio of 80 times [2][11]. - The company has locked in $500 billion in revenue from its Blackwell and Rubin series from early 2025 to the end of 2026, indicating strong future revenue visibility [8]. - Nvidia's Q3 data center GPU revenue in the Chinese market was only $5 million, aligning with analyst expectations regarding the lack of large purchase orders in that region [10]. Group 3: Management Insights - CEO Jensen Huang addressed concerns about an AI bubble, emphasizing that the growth trajectory remains strong and that financing decisions are primarily made by customers [6]. - Huang cited Meta's GEM model as an example of how AI is driving significant revenue growth, with ad conversion rates improving by over 5% on Instagram due to generative AI [6]. Group 4: Stock Performance and Valuation - Following the earnings report, Nvidia's stock initially rose but then fell nearly 8%, erasing all gains, which analysts view as an opportunity rather than a concern [1][11]. - Analysts believe that if Nvidia's stock price drops to $150, its forward P/E ratio would decrease to 32 times, making it an attractive buy given the upcoming Rubin GPU launch [11].

Core Viewpoint - The article discusses the potential release of the H200 chip in China, highlighting its specifications and performance compared to domestic AI chips, while also considering the geopolitical context surrounding the decision [2][3][20]. Specifications and Performance - The H200 chip features significant improvements over the H100, including 141 GB of HBM3e memory and a memory bandwidth of 4.8 TB/s, compared to the H100's 80 GB and 3.35 TB/s [9]. - The H200's FP64 Tensor Core performance is 34 teraFLOPS, which is competitive with other high-end chips like the B200 and H100 [18]. Market Context - The article notes that the H200 is currently priced higher than the B200 in certain cloud service providers due to its suitability for high-precision computing and its scarcity [17]. - The usage of H200 in overseas cloud servers remains high, driven by legacy workloads that are difficult to migrate from older cards [19]. Geopolitical Considerations - The potential release of the H200 in China is contingent on the U.S. government's stance, particularly the influence of hawkish advisors [3][20]. - The article suggests that if the U.S. does allow the release of the H200, it is likely that China would follow suit [20].

Core Viewpoint - Nvidia is expected to report strong earnings for Q3 FY2026, with adjusted earnings per share projected at $1.26 and revenue estimated at $55.28 billion, reflecting over 55% year-over-year growth [1] Group 1: Data Center Business - The data center business is anticipated to be a key growth driver, benefiting from the increasing adoption of cloud solutions and strong demand for Nvidia's chips in the generative AI and large language model markets [2] - Estimated revenue for the data center segment in Q3 is $48.04 billion, indicating a robust year-over-year growth of 56.1% [2] Group 2: Gaming and Professional Visualization - The gaming segment is showing signs of recovery, with estimated revenue for Q3 at $4.71 billion, representing a 43.7% increase compared to the previous year [2] - The professional visualization segment is also expected to continue its growth trend, with estimated revenue of $678.9 million, reflecting a 39.7% year-over-year increase [3] Group 3: Automotive Sector - The automotive segment is projected to see continued improvement, with estimated revenue for Q3 at $624.8 million, which would mark a 39.1% year-over-year growth [3] Group 4: Generative AI Market - Nvidia is positioned as a leader in the generative AI chip market, with increasing demand across various industries, including marketing, healthcare, and gaming [4] - The global generative AI market is expected to reach $967.65 billion by 2032, with a compound annual growth rate of 39.6% from 2024 to 2032 [4] Group 5: Analyst Sentiment - Analysts from Jefferies and Wedbush expect Nvidia to exceed earnings expectations and raise future guidance, citing strong capital expenditure trends from large-scale enterprises [6] - Bank of America maintains a target price of $275, anticipating assurances from Nvidia executives regarding their capacity to meet demand [7] - Oppenheimer analysts have raised Nvidia's target price, identifying it as the most likely winner in the AI sector [9]

Core Insights - Nvidia is expected to provide positive indicators regarding AI spending in its upcoming earnings report, reflecting strong demand and growth in the AI sector [2][3][12] - The company has seen significant growth in sales tied to AI products, with expectations of continued upward momentum in Q3 and Q4 [3][12] - Nvidia's stock valuation appears reasonable compared to peers, trading at about 28 times earnings, which is not considered expensive [4][5] Financial Performance - Nvidia is projected to report earnings per share (EPS) of $1.25, representing a 54% year-over-year increase, and revenue of $55.1 billion, up 57% [16][17] - The growth rate is expected to decelerate compared to previous quarters, reflecting the law of large numbers as the company matures in the AI market [18][20] - The company has not modeled any revenue from China, which remains an outstanding issue, but any future sales from this market would be considered a bonus [20][21] Market Dynamics - Approximately 50% of Nvidia's revenue comes from hyperscalers, with major players like Meta, Amazon, Google, and Microsoft continuing to invest heavily in AI infrastructure [22] - Increased competition is emerging as companies like AMD develop their own solutions, although Nvidia still holds a dominant market share of around 90% [24][25] - The total addressable market (TAM) for AI data centers is projected to reach $1 trillion by 2030, indicating significant growth potential for the industry [15]

Core Insights - NVIDIA Corporation (NVDA) is expected to report strong earnings for Q3 fiscal 2026, with projected revenues of $54 billion, reflecting a 55.6% year-over-year increase [1][7] - The Zacks Consensus Estimate for earnings per share is $1.23, indicating a 51.9% growth from the previous year's earnings of $0.81 [2] Revenue Breakdown - The Data Center segment is anticipated to generate revenues of $48.04 billion, showing a robust year-over-year growth of 56.1% [8] - The Gaming segment is projected to achieve revenues of $4.71 billion, representing a 43.7% increase from the prior year [9] - The Professional Visualization segment is expected to report revenues of $678.9 million, indicating a 39.7% rise year-over-year [10] - The Automotive segment is forecasted to generate revenues of $624.8 million, reflecting a 39.1% growth compared to the previous year [11] Market Position and Valuation - NVIDIA's stock has increased by 39.1% year-to-date, outperforming the Zacks Computer and Technology industry's growth of 26.3% [12] - The company trades at a forward P/E of 31.88X, which is higher than the sector average of 29.08X, indicating a premium valuation [15] - Compared to other semiconductor companies, NVIDIA's valuation is at a premium to Advanced Micro Devices and Broadcom, but at a discount to Intel [17] Growth Drivers - The demand for generative AI and large language models is driving growth in the Data Center segment, with strong demand from cloud service providers [6][7] - The global generative AI market is projected to reach $967.65 billion by 2032, with a CAGR of 39.6% from 2024 to 2032, indicating significant growth potential for NVIDIA's AI chips [19] - NVIDIA's advanced AI chips are essential for enterprises looking to upgrade their network infrastructures to support generative AI applications [20] Investment Consideration - NVIDIA's leadership in the semiconductor industry, particularly in GPUs and AI, positions the company as a compelling investment opportunity [21]