Goldman Reaffirms Convention Buy Opinion After CEO Jensen Huang's Remarks At Con

Goldman Reaffirms Convention Buy Opinion After CEO Jensen Huang's Remarks At Conference

1. Accelerated Computing: Hwang stressed that the long-claimed "Law of Moore" is not delivering the same pace of innovation as in the past, which leads to higher computing costs in data centers. He also explained that the $1 trillion data center infrastructure will be a growth engine over the next decade just by being dense and accelerated. This can lead to performance improvements or cost savings.

2. Customer ROI: Hwang explained that with the end of transistor scaling, the better utilization and cost savings that were possible in previous virtualization and cloud computing cycles are no longer possible. He stated that while absolute costs would be roughly doubled if GPUs were used to supplement CPUs, net cost gains could reach about 10 times as fast as applications like Spark could be around 20 times faster. From a monetization perspective, he shared that hyperscale customers could earn a rental income of $5 for every dollar invested in Nvidia infrastructure. This suggests that demand for accelerated computing is consistently strong.

3. Competitive Advantage: As for the company's competitive advantage, CEO Hwang highlighted the ability of a) a foundation for large GPU installations across multiple platforms, b) the ability to supplement hardware with software (such as libraries per domain), and c) the ability to build rack-level systems and innovate on different chips. Notably, Nvidia is designing seven chips for the Blackwell platform.

4. Supply Chain Thoughts: Hwang noted how agile Nvidia's supply chain partners are. He explained that sales growth that occurred in the second half of 2023 and 2024 could not have been achieved without the help of major suppliers like TSMC. Nevertheless, Nvidia added that it has the capability to leverage its internal intellectual property to shift production uninterrupted if required during the manufacturing process.

5. Reaffirming the Blackwell Schedule: CEO Hwang reiterated that the company will begin shipping Blackwell-based products in Q4 FY25 and that shipments will expand in FY2026(25). It also said it feels responsible as a key provider to CSPs (+ other companies) developing AI.