- Mizuho analyst Vijay Rakesh lowered the price target further Nvidia Corp NVDA to $205 from $225 and held a purchase Valuation.
- US hyperscale ‘remains strong into late 2022’, with modest ‘pushbacks’, but there could be a potential slowdown in the first half of 2022.
- He believes some hyperscalers could experience a slowdown by the end of 2022 due to macro concerns.
- His reviews show that hyperscale orders are seeing “pushbacks” but not cancellations, with Q3 trending flat quarter-over-quarter and Q4 “potentially soft.”
- Rakesh said a slowdown between Europe and China, memory (DDR5) and PCIe Gen5 are the key server issues as broad-based chip offerings have improved significantly.
- Rakesh claims Advanced Micro Devices Inc AMD with a purchase and lower the price target from $140 to $125.
- Rakesh cut estimates for AMD ‘as macro headwinds cloud near-term prospects’.
- He sees data center strength slowing and the negative impact of the ban on sales to China affecting both companies in the near term.
- Longer term, he still sees AMD and NVDA well positioned to strive for better cloud, HPC, and AI workloads.
- Only one week The US has restricted sales of Nvidia’s high-performance AI chips for servers, the A100 and H100, to China and Russia, citing national security concerns.
- The US also asked AMD to stop exporting its MI250 chips to China. The share prices of the chip manufacturers and the iShares Semiconductor ETF SOXX came under significant pressure on September 7 after the embargo.
- However, Rakesh saw that the restriction could allow access and focused primarily on a workaround for the next few months.
- Price promotions: NVDA shares traded 1.68% lower at $129.08 on the last check Thursday. AMD shares traded 1.20% lower to $76.52.
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