Nvidia (NASDAQ:NVDA)
Even though Bank of America has maintained its buy recommendation on the GPU giant Nvidia (NASDAQ:NVDA) and cited “strong share gains” in the market as the reason, Nvidia stock fell during premarket trading on Thursday.
According to the most recent monthly survey of deployed GPUs and CPUs utilized by Steam PC players, the share held by Nvidia increased by around 700 basis points month-over-month to 82.6%. This was noticed by analyst Vivek Arya. However, Arya noted that the results could be unreliable due to a sudden increase in participants whose operating systems were written in simplified Chinese.
In a letter to investors, Arya wrote, “While still generally positive for NVDA, we note overcounting customers at Asian cyber cafes inflated NVDA share results in prior periods as well (2017/18, potentially late 2020).”
The poll also indicated a similar increase for Intel, which was up around 800 basis points month-over-month at the time of the survey.
Arya pointed out that Nvidia’s top graphics cards, the RTX 30 and 40 series, sell at “modest” 7% to 8% premiums at third-party e-commerce stores. This contrasts discounts ranging from 10% to 40% for vintage AMD (NASDAQ:AMD) cards. Despite the possible complications from the study, Arya made this observation.
According to Arya, the gaming industry is “on the mend,” The two semiconductor businesses could gain from the improvements in artificial intelligence and the data center.
In addition to easier unit comparisons, Arya expects a rise in average selling price (we forecast a 10% increase in 2023) because “like last cycle, both AMD/NVDA have actively cleared channel in early stages of new card launches” (NVDA RTX 40 series, AMD 7900 XT/XT). “More significantly, the focus of hyper scalers on AI and LLMs might hasten investment in Nvidia stock and AMD for both training and inference applications.”
A separate announcement on the new AMD Alveo MA35D media accelerator was made by AMD on Thursday.
At a recent conference, Jensen Huang, the Chief Executive Officer of Nvidia, claimed that the “iPhone moment for AI has started.”
Featured Image: Megapixl
