By Adam Clark
Nvidia stock was rising early Friday. The chip maker could face some obstacles in shipping new artificial-intelligence hardware in the first half of the year but there's reason to be patient.
Nvidia shares were up 0.6% at $136.10 in premarket trading. The stock rose 3.2% on Thursday.
Nvidia's multimillion-dollar GB200 NV liquid-cooled rack systems are expected to be in high demand this year as the most advanced AI infrastructure. However, it could take some time before that turns up on the company's top line.
"Not unexpectedly, Nvidia GPU AI servers with GB200 drive a complex connectivity/power upgrade and, near-term, we estimate some growing pains. Our checks indicate that while JanQ DC [January-quarter data-center revenue] is expected in-line, AprQ could be more flattish as near-term ramps remain modest," wrote Mizuho analyst Vijay Rakesh in a research note.
Rakesh now expects Nvidia to report $36.7 billion in data-center revenue for the April quarter, below consensus estimates of $37.4 billion.
However, investors should be patient and hold out for a big increase in Nvidia's AI chip sales coming through from May onward -- driving a strong second half of the year, according to Rakesh.
Rakesh has an Outperform rating and $175 target price on Nvidia stock.
Nvidia is set to have roughly 44% of the AI server market in 2027 by shipments due to its hardware and software advantages, according to the analyst. Due to its strong selling prices, that would put its revenue at $260 billion, taking the majority of the total $350 billion AI accelerator chip market, according to Mizuho's estimates.
Among other chip makers, Advanced Micro Devices was rising 1.2% and Broadcom was broadly flat in premarket trading.
Write to Adam Clark at adam.clark@barrons.com
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February 14, 2025 05:05 ET (10:05 GMT)
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