Kimihiko commented on a stock · Dec 18, 2024 14:49

As the financial performance recently announced by the two semiconductor manufacturers, Marvell and Broadcom, greatly exceeded expectations, investors are starting to worry that NVIDIA's GPUs may be replaced by custom ASIC chips.

On December 17, Citi analysts Atif Malik and Papa Sylla released a report supporting NVIDIA, reaffirming that "these two types of chips coexist". Citi expects the total market size of AI accelerators (TAM) to reach 380 billion dollars by 2028, with AI GPUs accounting for 75% of the share and ASICs accounting for only 25%.

Analysts believe that NVIDIA's GPUs supporting software reprogramming through CUDA and adapting to different workloads is NVIDIA's greatest strength.

Citi also mentions that while the share of ASIC units combined could surpass 35% in 2028, the sales share of ASICs might be limited to around 25% due to the high average selling price (ASP) of AI GPUs.
Furthermore, discussions in Citi's supply chain indicate that NVIDIA's Cowos Foundry production capacity allocation is expected to increase from 56% in 2024 to 60% in 2025, suggesting continued strong growth for GPUs in 2025.

Citi maintains a 'Buy' rating for NVIDIA and has set a target price of $175, indicating about 34% potential upside for NVIDIA. In Post-Market Trading, NVIDIA's stock price increased by 0.53%.

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Kimihiko

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