A new chip from Nvidia could prove the next major catalyst for the artificial intelligence darling in 2024, according to Wall Street analysts. Year to date, Nvidia shares have more than tripled on the promise of AI and the hope that surging demand for graphics processing units needed to build large language models will lift earnings and further boost the stock price. NVDA mountain 2023-08-31 Nvidia’s stock performance since August’s closing high But rising rates that could spell trouble for future growth at CEO Jensen Huang’s company have lately put a dent in that rally, with Nvidia down 9% since its August closing high. Even so, Wall Street remains bullish on the chipmaker, with about 85% of analysts holding a buy rating on the stock, and the average price target implying 43% upside from Friday’s close. While the launch of the next-generation chip known as Blackwell isn’t expected until 2024, Wall Street analysts are already bracing for the debut to drive significant growth at Nvidia, which already dominates the AI market. “Per our estimations, B100 GPU could be an even bigger AI game changer than H100 at its launch from a technology standpoint and set for a rapid adoption which subsequently will drive up Nvidia’s [average selling price], sales, and margins,” Citi analyst Atif Malik wrote in a recent note, referring to Nvidia’s new chip model and graphics processing units. NVDA YTD mountain Nvidia shares year to date Some reports suggest that the architecture will adopt Taiwan Semiconductor Manufacturing’s 3nm (nanometer) process technology, and will utilize a multi-chiplet design to enhance performance. The next generation chips offer increased transistor density, faster speed and reduced power. The chip is also slated to carry a higher average selling price and better performance than Nvidia’s current H100 model. Piper Sandler’s Harsh Kumar called the product the “next-gen compute GPU product” for AI and high performance computing. According to estimates from KeyBanc Capital Markets, the transition to higher-priced B100 GPUs toward the end of 2024 should play a pivotal role in boosting Nvidia’s datacenter revenues. Combined with more chip on wafer on substrate (CoWoS) capacity coming online, KeyBanc analyst John Vinh projects a 201% uplift in datacenter revenues in calendar 2023, to $45 billion. Higher-priced GPUs could boost those revenues to $101 billion in calendar 2024. CoWoS is a chip packaging technology used in Nvidia’s chips. “Longer term, we see more meaningful capacity coming online in 2H24, as well as continued outsized growth as NVDA looks to pull in the ramp of its next generation GPU, the B100, into 4Q24,” Vinh said in an early October note. — CNBC’s Michael Bloom contributed reporting
