Nvidia's Top 5 Picks! Riding the Wave of Blackwell's Massive Shipments in 25 years, such as Connectors and Power Supplies.

ビットバレー投資家 wrote a column · Nov 22, 2024 17:42

$NVIDIA (NVDA.US)$ Announced earnings on November 20. Concerns about delays have emerged.Next-generation AI semiconductor BlackwellRegarding,Jensen Huang, CEOis in full production.It is assumed that, and the November-January quarterplans to ship more than the previous estimatesas stated.2025年on a quarterly basisan increase in shipmentsindicating expectations to exceed current product Hopper for both Hopper and Blackwelldemand for both is exceptionally strong.Good news for suppliers of Nvidia.This can be said.

At the earnings callJensen Huang, CEOBlackwell is expected to achieve shipments of tens of billions this quarter, which is a great achievement for the company.Great partner.Indicated that it was thanks to Mass production of the Blackwell systemTo achieve this,it is necessary to significantly expand the supply chain of components on a large scaleand introduced major suppliers. This time,nvidia's 「Great partner.」からTaking into account the performance outlookand,Top 5 "hidden gems" of NVIDIAwere picked up.

Nvidia's 'excellent partner'
● Blackwell's OEM and component-related companies
Nvidia CEO Jensen Huang discussed suppliers, with analysts questioning whether Blackwell had made changes to GPU masks and reported overheating issues in the current situation.There were no problems with the production startup.when asked if there were any issues.

While CEO Jensen Huang did not directly address the overheating issues, he mentioned that the total shipment volume for the current quarter (November to January) is expected to exceed tens of billions, indirectly dismissing concerns about delays. He also explained that this was thanks to the wonderful partners involved in the supply chain.The great partners involved in the supply chainexplained Jensen Huang CEO. The following are CEO Jensen Huang's commentsJensen Huang CEO's commentsIt has become clear that Nvidia's strong sales and forecasts are supported by the company's Graphics Processing Unit (GPU) becoming a central player in the generative AI boom.

Regarding the supply chain,Blackwell systemWe have built seven custom chips to provide the Blackwell system, including seven different chips. The Blackwell system adopts air-cooled or water-cooled, NVLink 8, NVLink 72, NVLink 8, NVLink 36, NVLink 72, x86 or Grace, and integrating all these systems into datacenters worldwide is truly a miracle. Therefore, it is necessary to significantly expand the supply chain for the components.expanding the supply chain of components on a large scale.

In the previous quarter, Blackwell's shipments were zero. The total number of shipments in the current quarter is expected to reach several billion units, and the growth is remarkable. It seems that most companies worldwide are involved in our supply chain. We have great partners like TSMC, connector manufacturer Amphenol, Bartive, SK Hynix (a South Korean company), Micron, Amkor Technology, Kyocera, Foxconn, Quanta Computer, Wistron, Dell, HP, Super Micro, Lenovo, etc. (Companies with Chinese characters in their names are Taiwanese companies, not listed on the ADR in the US market).

Please refer to the following for NVIDIA's earnings report content.[Summary of Earnings] NVIDIA, No Blackwell Delay! 4Q Shipments to Expand Next Year - Will the AI wave arrive in 2025?

●Partner in the enterprise AI field
At NVIDIA's earnings call,the next wave of AIwas indicated to beEnterprise artificial intelligence.andindustrial AIAnd,Enterprise artificial intelligence.はいま、"全速力で前進している”と説明した。その際に、事例としてアクセンチュアを挙げた。

エヌビディアのエンタープライズAI事業においてもう一つ重要なパートナーはデルだ。たとえば、Blackwellの需要について言及する際、販売先企業として下記のコメントがあった。

「Blackwellの需要は非常に強い。我々の実行は順調に推移している。また、世界中で多くのエンジニアリングを行っている。DellやCoreWeave（未上場企業）のシステムが立ち上がっているし、オラクルのシステムも立ち上がっている。マイクロソフトも、Grace Blackwellのシステムをプレビューしようとしている。グーグルのシステムもある。このように、すべてのクラウドサービス・プロバイダーが一番乗りを目指して競争している。」

Among the above, $Oracle (ORCL.US)$ や $Microsoft (MSFT.US)$ Google, as a cloud service provider, directly purchases AI semiconductors from nvidia to deploy its own services. Apart from these companies, Dell, a major IT company for corporations, is also mentioned. Dell has enhanced its partnership with nvidia in March of this year to provide nvidia-based AI factory solutions to accelerate AI adoption in enterprises worldwide. In other words, Dell plays a role in connecting nvidia with companies other than cloud service providers.

★エヌビディアの”黒子”5選
Nvidia's wonderful partnersfromTaking into account the performance outlookand,Nvidia's "unsung hero"specifically, Nvidia's leading supplier, TSMC (TSM), Connector manufacturer Amphenol (APH), a power supply manufacturer,Veritiv Holdings (VRT)andDell (DELL)andAccenture (ACN)Indeed.

デルandaccentureNot a hardware company, but a key partner in Envidia's enterprise AI business. As a significant company supporting the expansion of Envidia's AI semiconductor system from behind the scenes, it could be called a "shadow."

Expanding the scope of 'dark horse' may also include major optical fiber players like amphenol. $Coherent (COHR.US)$ Coherent is etc.（ $Furukawa Electric (5801.JP)$ 、 $Sumitomo Electric Industries (5802.JP)$ 、 $Fujikura (5803.JP)$ Sumitomo Electric Industries is a global competitor. They have achieved good performance thanks to the benefits of AI datacenters, but this will be omitted for editorial reasons.

● $Taiwan Semiconductor (TSM.US)$
◇Foundry world leader.Ranked 1st in AI semiconductor contract manufacturing. According to data from Bloomberg's supplier chain feature, TSMC accounts for approximately 36% of NVIDIA's costs as its top supplier. NVIDIA, being a fabless company without factories, benefits from TSMC's high technological expertise and extensive production capabilities in the foundry industry.

◇The performance for the July-September quarter Against the backdrop of AI demand, it achieved record profits. During the earnings call, the management stated, "The demand is real. We believe it's just the beginning." With strong demand, the revenue forecast for 2024 has been revised upwards.2024 Revenue Forecast.has been increased.
Related Articles:【Earnings Summary】Taiwan TSMC achieves a complete victory in earnings! Net profit increases by 54%, a "reversal move" in the semiconductor industry.

◇月次ベースThe revenue for October to be announced increased by 29.2% compared to the same month last year, marking the first growth since February. While there are concerns that this may indicate a slowdown in AI demand, there are also voices highlighting the strength of demand for NVIDIA's AI semiconductors and the full-fledged launch of Blackwell.2025年Considering the situation, it may not be necessary to overly worry about the slight slowdown in monthly growth.

◇トランプ大統領の再選Geopolitical risks associated with the election may be a factor in suppressing TSMC's stock price. In the approximately one week after President Trump's election was confirmed, the stock price dropped by about 7%. However, it has been recovering since mid-November. Some analysts do not expect the new Trump administration to directly have a significant impact on TSMC, and they also note that there is a high possibility of not significantly increasing tariffs on the tech sector based on the experience during the previous Trump administration.

Nvidia's Top 5 Picks! Riding the Wave of Blackwell's Massive Shipments in 25 years, such as Connectors and Power Supplies.

● $Amphenol (APH.US)$
◇Connector manufacturer.Designs, manufactures, and sells electrical connectors, optical fiber connectors, interconnection systems, coaxial cables, etc. Although a supplier of nVidia, exposure to the final customer market has diversified, with a balanced portfolio. For example, IT telecom, industrial, automotive, defense, etc. Regarding one of its core businesses, IT telecom, the management mentioned at the October earnings call that it is "very strong in every aspect". AI-related" is performing very well in every aspect" in response to the IT telecom sector at the earnings call at the end of October.

◇Performance for July-SeptemberRevenue reached a record high of 4.04 billion dollars, adjusted EPS was $0.5, both exceeding market expectations of $3.81 billion and $0.45. Management stated, "Strong organic growth (15% increase) in IT data communications, mobile networks, mobile devices, commercial aviation, and defense markets, along with acquisitions, contributed to the excellent performance." Backlog also reached a record high of 4 billion dollars, a 39% increase year-on-year. The strong performance of the IT data communications market was a major factor in the expansion of orders.Guidance for October-December QuarterRevenue is expected to be $3.95 billion to $4.05 billion, with adjusted EPS ranging from $0.48 to $0.50, surpassing market forecasts of $3.94 billion and $0.48, respectively.

Adjusted EPS trend, LMT over the past 12 months, Source: Company Data

● $Vertiv Holdings (VRT.US)$
◇Power supply manufacturer。電力制御やデータセンター冷却ソリューション、電源装置などを提供する。冷却装置に強みを持つ。11月19日に、同社は2つの新しいVertiv CoolChip CDU (冷却剤分配ユニット) システムの導入により、液体冷却製品ポートフォリオを大幅に拡張すると発表した。「これらのシステムにより、データセンターでのモジュール式でコスト効率の高い液体冷却の導入が可能になり、従来の空冷ラックと並行してAI用の高密度コンピューティングを運用できるようになる」という。

◇The company データセンターやハイパースケールDue to the accelerating colocation market, the revenue composition by department in 2024 will beデータセンターが8割It is expected to reach that amount. Subsequently, communication networks and commercial and industrial sectors are expected to account for 10% each.

Product portfolio and market ratio by product category, Source: Company Data

◇Revenue outlook for the next 5 years (2025-2029)The company expects to expand at a growth rate of 12-14% annually. With leadership in the datacenter market, they believe they can achieve a growth rate above the market average. At the Investor Day on November 19, the management team stated that 2024 would be a good year, and growth would accelerate in 2025. They anticipate an improvement in profit margin alongside the expansion of revenue (from 15.3% in 2023 to an expected 25% in 2029).

Revenue and operating margin outlook for the next 5 years, Source: Company materials.

● $Dell Technologies (DELL.US)$
◇As a major player in the corporate IT sectorNvidia'sEnterprise artificial intelligence.business is forming a partnership. In the next few years, benefits of AI implementation in the enterprise sector other than hyperscalers are also expected.

Dell and Nvidia strengthened their partnership in May this year and announced the expansion of 'Dell AI Factory with NVIDIA'. In the announcement material, Nvidia's CEO Jensen Huang stated: 'To create AI, a new type of computing infrastructure, namely an AI factory that generates intelligence, is needed. Together with Dell Technologies, we are delivering a full stack of products including computing, networking, and software to a wide range of industries worldwide, thereby driving Copilot, coding assistants, virtual customer service agents, and promoting the industrial digital twin of the digital enterprise.'

◇For the July-September quarter, revenue increased by 9% from the same period last year to $25 billion, exceeding market expectations.Revenue for the 5-7 month period increased by 9% compared to the same period last year, reaching $25 billion, surpassing market estimates.AIOptimized for Server order amountreached 3.2 billion dollars, an increase from the previous quarter's 2.6 billion dollars.The revenue guidance for the August-October periodcame in around 24.5 billion dollars, matching market expectations. The earnings announcement for the August-October period is scheduled for November 26 (tentative).

◇in the AI server fieldTherefore, $Super Micro Computer (SMCI.US)$ Bloomberg's supply chain feature identifies NVIDIA as one of the strongest rivals. Among the major server giants, Dell ranks second after Super Micro in terms of revenue composition attributed to NVIDIA. Before the series of issues with Super Micro came to light, Dell had already established a good partnership with NVIDIA.jackpotThe issues with Super Micro may become an opportunity for Dell.

● $Accenture (ACN.US)$
◇Leading consulting services provider.Provide consulting services and solutions related to management and technology. On October 2,announced an expanded partnership with NVIDIA.NVIDIA explained that the partnership is part of its efforts to promote AI adoption within the company and increase its product orders. Accenture has established the NVIDIA business group to support customers in utilizing AI tools.

◇According to NVIDIA's materials,"Consulting leaders like Accenture and Deloitte provide NVIDIA AI to companies worldwide. Accenture has launched a new business group with 0.03 million professionals trained in NVIDIA AI technology, accelerating this global deployment."

◇At the same time,Accenture itself"Utilizes Agentic AI applications with NVIDIA internally, including cases where manual work in marketing campaigns has been reduced by 25% to 35%."

◇The performance for the June-August quarterBoth revenue and adjusted EPS (earnings per share) for the quarter exceeded market expectations.The amount of orders receivedAmounted to $20.1 billion, an increase of 21% compared to the same period last year, surpassing the market expectation of $18.6 billion. The revenue outlook for the September-November quarter also exceeded market expectations at the median. The earnings report is scheduled to be released on December 19th (tentative).