Is now a buying opportunity for nvidia? -Rakuten Securities' Imazaka
◆ The growth potential of nvidia that the market has not fully grasped
Last week, on September 18th (local time), during the FOMC (Federal Open Market Committee) meeting, the FRB (Federal Reserve Board) finally decided to cut interest rates by 0.5%. The rate cut was larger than my prediction, but with hopes of a soft landing for the US economy, the stock market saw major indexes rising across the board. With the significant event that captured the market's attention passed, it seems that now might be a good time to prepare for buying high-tech stocks in the U.S., which had entered a correction phase from the July highs.
While skepticism regarding AI still persists in the market, let's objectively examine the current situation of key players in the AI market, including nvidia, and the market's response. In nvidia's financial results for the May-July 2024 period, the company delivered outstanding performance. However, the market was concerned about the decrease in gross profit margin, leading to a decline in the stock price. This was due to the full-scale production of the current flagship AI semiconductor "H100" and the start of initial production of the next-generation chip "Blackwell," causing a decrease in productivity. As mentioned by CEO Jensen Huang at the recent Goldman Sachs Group conference, customers are emotionally affected by the insufficient supply of AI semiconductors, indicating the continued strong demand for the company's products.
According to CEO Huang, the demand for "Blackwell" exceeds supply in 2025, and the same trend is expected to continue in 2026. While the expansion of business shows no sign of slowing down, the stock market may not have fully grasped this yet. Currently, major cloud services such as Amazon.com's AWS, microsoft's "Azure", and Alphabet's "Google Cloud" are procuring AI semiconductors, with various high-tech companies entering the stage of application development.
The current level of demand for AI applications remains unclear, possibly underpinning the existing skepticism. However, given the current strength of demand, it seems reasonable to expect continued market growth for AI semiconductors. If businesses from major IT companies to startups do not succeed in selling generative AI and generative AI applications, this generative AI boom may come to an end. Yet, with creators actively using image-generating AI and video-generating AI since the emergence of generative AI, and the increasing popularity of microsoft's AI assistant "Copilot," there is a high likelihood that various generative AI applications will be launched next year and perform well. In that case, the development projects for generative AI and generative AI applications will increase, leading to further business growth for nvidia. With this perspective, the current stock price of the company seems undervalued, making it a good buying opportunity.
Last week, on September 18th (local time), during the FOMC (Federal Open Market Committee) meeting, the FRB (Federal Reserve Board) finally decided to cut interest rates by 0.5%. The rate cut was larger than my prediction, but with hopes of a soft landing for the US economy, the stock market saw major indexes rising across the board. With the significant event that captured the market's attention passed, it seems that now might be a good time to prepare for buying high-tech stocks in the U.S., which had entered a correction phase from the July highs.
While skepticism regarding AI still persists in the market, let's objectively examine the current situation of key players in the AI market, including nvidia, and the market's response. In nvidia's financial results for the May-July 2024 period, the company delivered outstanding performance. However, the market was concerned about the decrease in gross profit margin, leading to a decline in the stock price. This was due to the full-scale production of the current flagship AI semiconductor "H100" and the start of initial production of the next-generation chip "Blackwell," causing a decrease in productivity. As mentioned by CEO Jensen Huang at the recent Goldman Sachs Group conference, customers are emotionally affected by the insufficient supply of AI semiconductors, indicating the continued strong demand for the company's products.
According to CEO Huang, the demand for "Blackwell" exceeds supply in 2025, and the same trend is expected to continue in 2026. While the expansion of business shows no sign of slowing down, the stock market may not have fully grasped this yet. Currently, major cloud services such as Amazon.com's AWS, microsoft's "Azure", and Alphabet's "Google Cloud" are procuring AI semiconductors, with various high-tech companies entering the stage of application development.
The current level of demand for AI applications remains unclear, possibly underpinning the existing skepticism. However, given the current strength of demand, it seems reasonable to expect continued market growth for AI semiconductors. If businesses from major IT companies to startups do not succeed in selling generative AI and generative AI applications, this generative AI boom may come to an end. Yet, with creators actively using image-generating AI and video-generating AI since the emergence of generative AI, and the increasing popularity of microsoft's AI assistant "Copilot," there is a high likelihood that various generative AI applications will be launched next year and perform well. In that case, the development projects for generative AI and generative AI applications will increase, leading to further business growth for nvidia. With this perspective, the current stock price of the company seems undervalued, making it a good buying opportunity.
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