en.Wedoany.com Reported - Gil Luria, head of technology research at investment bank DA Davidson, stated that hyperscale cloud service providers still have limited alternatives for AI data center chip supply, and Nvidia's profit margins will be strongly supported until 2030. Luria pointed out that hyperscale cloud service providers have few options and are almost entirely dependent on Nvidia chips, making Nvidia's gross margin of around 75% relatively stable.
Although hyperscale cloud service providers are engaging with chip manufacturers such as Broadcom and AMD to reduce reliance on a single supplier, Nvidia still dominates the AI chip supply for large data center customers. Nvidia's latest quarterly sales surged 85% year-over-year to $81.6 billion (approximately 554.289 billion yuan at current exchange rates), with a gross margin of 75% after deducting production costs.
Luria gave Nvidia a "buy" rating with a target price of $300 (approximately 2,038 yuan at current exchange rates), representing about 37% upside from Thursday's closing price. He believes that competitors are still in a very early stage, and hyperscale cloud service providers may not have strong bargaining power.
Meanwhile, due to massive capital investments in expanding AI production capacity, investors have become more cautious about the short-term prospects of large chip companies. Nvidia's stock has surged over 1,300% in the five years ending December 31, but fell after its May 20 earnings report exceeded market expectations. On Thursday local time, Broadcom's AI chip sales outlook failed to meet investor expectations, causing its stock to post its biggest drop in over 16 months. Luria believes that Broadcom delivered a very good performance given its revenue growth, but investors have now been trained to expect more.
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