Nvidia (NVDA) recently updated its product pipeline and based on the revised roadmap, the chip giant intends to transition from its previous two-year product launch cycle to a one-year schedule. Furthermore, the company is expanding the range of products on offer.
After going over the new roadmap, Bank of America’s Vivek Arya, a 5-star analyst ranked in the top 1% of Street analysts, reiterates that Nvidia remains a top pick, highlighting an overhauled pipeline that shows: “(1) an accelerated pace of GPU accelerator and switching product launches in CY23/24/25; (2) support for x86 and ARM-based CPUs; (3) InfiniBand + Ethernet switches; (4) handling both genAI training, inference; and (5) support for cloud and enterprise applications.”
Although the roadmap doesn’t provide details about the specific manufacturing nodes, Arya anticipates Nvidia will take a leading role in introducing AI accelerators on advanced nodes such as 3nm and possibly 2nm. There may be a collaboration with Intel’s foundry on its 18A process, but the analyst still anticipates TSMC will remain NVDA’s main foundry partner.
Much like Nvidia’s approach in the gaming sector, where products cover a range of prices from $50 to $1,500, it appears that the newly revealed data center roadmap indicates an expansion of product offerings. This expansion includes a quicker pace of product launches, an approach that may pose challenges for competitors in the space such as AMD and Intel, making it harder for them to catch up. It also puts pressure on internal cloud silicon efforts to demonstrate their worth in a time when silicon costs and complexity are rapidly increasing.
“Big-picture,” says Arya, “generative AI requires data center scale compute optimization, and NVDA’s systems approach stands in contrast to the narrow silicon-only approach of its rivals.”
Given the Street’s respective CY23/24/25E data center sales projections of ~$42 billion/$70 billion/$88 billion indicate just a ~35% share of a potential $250 billion (and rising) addressable yearly opportunity in cloud/enterprise data center infrastructure capex, Arya thinks there could be upside to these estimates.
Bottom line, Arya rates NVDA shares a Buy along with a price objective of $650. Should the figure be met, investors will be sitting on returns of 42% a year from now.
The Street’s average target is in-line with Arya’s objective. Rating wise, 38 other analysts are bullish too, with 1 additional Hold not enough to spoil the stock’s Strong Buy consensus rating.
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Originally published on BusinessInsider.com
