NVIDIA Corp._ Reiterating Top Pick as the DeepSeek selloff is a buying opportunity

Summary of NVIDIA Corp. Conference Call Company Overview - Company: NVIDIA Corp. (Ticker: NVDA) - Industry: Semiconductors - Market Cap: $3,122.918 million - Current Stock Price: $124.83 - Price Target: $152.00 - Fiscal Year Ending: January 2024 Key Points and Arguments Industry Context - The sentiment around NVIDIA has worsened due to potential long-term risks associated with DeepSeek, but near-term business remains strong with increasing customer spending [1][3] - DeepSeek represents a significant evolutionary upgrade in the AI space, but it is one of many advancements in the past year [3][4] Financial Performance - EPS estimates for fiscal years are projected to grow from $1.30 in FY 2024 to $4.98 in FY 2027, indicating strong growth potential [7][57] - Revenue is expected to grow significantly, with projections of $128.866 billion in FY 2025 and $185.737 billion in FY 2026 [57] Risks and Challenges - Potential risks include further export controls, a changing financing environment for AI investments, and negative investor sentiment [5][13][14] - The government is expected to implement more restrictions, which could disrupt operations at the margin [11][12] - Investor sentiment has turned negative, which may not correlate with near-term results, but could impact revenue acceleration [14] Growth Drivers - Confidence in NVIDIA's Hopper and Blackwell architectures is building, with expectations of strong demand for both [10][15] - Large training clusters are still being built, indicating ongoing commitment from major customers despite market pressures [19] - Inference growth is expected to drive multiple years of growth, with NVIDIA maintaining a strong position in this market [20] Competitive Landscape - The market has recently favored ASIC over GPU solutions, but this trend is expected to reverse in the second half of 2025 as NVIDIA's GPU revenue accelerates [22] - NVIDIA's incumbency in training provides a competitive advantage, especially as GPUs can be repurposed for inference tasks [26] Market Sentiment and Pricing - Despite recent stock selloffs, pricing remains constructive, with unchanged list pricing across major cloud platforms [30] - Spot pricing for H100 GPUs has seen some regional increases, which is viewed positively for NVIDIA [31] Future Outlook - NVIDIA is expected to benefit from a strong ramp in Blackwell availability later in 2025, enhancing its competitive position [52] - The company is well-positioned to capitalize on growth in AI/ML hardware solutions, with incremental opportunities in software and services [52][63] Additional Important Insights - NVIDIA's stock is rated as "Overweight" by Morgan Stanley, reflecting confidence in its growth trajectory and market position [46][54] - The company is expected to trade at a premium due to its higher exposure to AI, with a projected revenue growth of 44.1% in 2025 [51][52] This summary encapsulates the key insights from the conference call, highlighting NVIDIA's current market position, growth potential, risks, and competitive landscape.