Is the NVDA delinquency problem limited?
I can't trust analysts' predictions, but as information.
In response to reports that there is a possibility of delays in production of NVIDIA's next-generation AI chip “Blackwell” series, analysts are analyzing the effects. It has been pointed out that delays of 3 months or more may occur due to design issues, but many analysts have expressed the view that the impact on demand and earnings is limited.
1 ️ ︎ Demand trends
Bernstein analyst Stacy Rasgon points out that “demand levels continue to rise, and all major hyperscalers are raising their capital investment prospects.” Also, as of May, NVIDIA CFO Colette Kress mentioned that there is a possibility that demand for Blackwell chips will exceed supply “all the way until next year,” reflecting that manufacturers such as TSMC are struggling to expand production capacity for AI chips requiring complex manufacturing technology, and demand for AI chips is still strong.
2 ️ ︎ Impact of delays and earnings forecasts
Also, Mr. Rasgon stated that “since NVIDIA's competitive period is currently very long, it is unlikely that a delay of 3 months will cause large market share fluctuations,” and even if a delay occurs, it is anticipated that sales of the “Grace Hopper” chip, which is an old model of NVIDIA, will fill that hole.
Analysts at TD Cowen have pointed out that even if there are minor delays, “there is a high possibility that these issues will be resolved through firmware or platform updates.”
Furthermore, it shows the view that these delays are not due to changes in AI chip demand that will drive NVIDIA's data center revenue in 2025.
📍 Future prospects
The possibility of delays in production of Blackwell chips could have an impact on NVIDIA's stock price in the short term. However, in the long run, NVIDIA's market advantage is likely to be maintained due to the following factors:
1. Over 80% share in the AI chip market
2. Strong customer base (Meta, Google, Microsoft, etc.)
3. Supplementing demand with the old model “Grace Hopper”
4. Continued increase in demand and expansion of customer capital investments
NVIDIA's strategic positioning is thought to be strong enough to overcome temporary production delays. The announcement of the company's official opinion on financial results at the end of this month is awaited.
1 ️ ︎ Demand trends
Bernstein analyst Stacy Rasgon points out that “demand levels continue to rise, and all major hyperscalers are raising their capital investment prospects.” Also, as of May, NVIDIA CFO Colette Kress mentioned that there is a possibility that demand for Blackwell chips will exceed supply “all the way until next year,” reflecting that manufacturers such as TSMC are struggling to expand production capacity for AI chips requiring complex manufacturing technology, and demand for AI chips is still strong.
2 ️ ︎ Impact of delays and earnings forecasts
Also, Mr. Rasgon stated that “since NVIDIA's competitive period is currently very long, it is unlikely that a delay of 3 months will cause large market share fluctuations,” and even if a delay occurs, it is anticipated that sales of the “Grace Hopper” chip, which is an old model of NVIDIA, will fill that hole.
Analysts at TD Cowen have pointed out that even if there are minor delays, “there is a high possibility that these issues will be resolved through firmware or platform updates.”
Furthermore, it shows the view that these delays are not due to changes in AI chip demand that will drive NVIDIA's data center revenue in 2025.
📍 Future prospects
The possibility of delays in production of Blackwell chips could have an impact on NVIDIA's stock price in the short term. However, in the long run, NVIDIA's market advantage is likely to be maintained due to the following factors:
1. Over 80% share in the AI chip market
2. Strong customer base (Meta, Google, Microsoft, etc.)
3. Supplementing demand with the old model “Grace Hopper”
4. Continued increase in demand and expansion of customer capital investments
NVIDIA's strategic positioning is thought to be strong enough to overcome temporary production delays. The announcement of the company's official opinion on financial results at the end of this month is awaited.
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