Unpacking Nvidia's Dominance and New Milestones in AI and Computing Platforms: Analysts

Citi analyst Atif Malik maintained a Buy rating on Nvidia Corp NVDA with a price target of $420 in a Wednesday note titled "NVIDIA Corp (NVDA.O) - Computex 2023: More Untapped TAM in Sight; Stay Long."
On Monday, CEO Jensen Huang reiterated the company's goal to bring Generative AI to data centers during Computex in Taipei.
While the company highlighted various products, the analyst deemed the announcements of 1) the firm's GH200 Grace-Hopper Superchip being in total production, 2) the new open accelerated computing server architecture: MGX Server, and 3) Nvidia's new Gen AI-focused end-to-end optimized Ethernet platform: Spectrum-X stole the show.
He estimates all three announcements depict Nvidia's effort to lean on its current AI accelerator dominance to establish a robust presence in what is potentially for the company a mostly untapped combined accelerated computing TAM of $1 trillion+ going from AI networking to the largely CPU-centered server market.
On Tuesday, BMO Capital analyst Ambrish Srivastava disclosed the latest Mercury data for CY 1Q23, showing that on the client side, Nvidia made significant gains on a Y/Y basis, increasing its discrete share to 89.4% vs. Advanced Micro Devices, Inc's AMD 9.7%. On the data center side, the yawning gap that Nvidia continues to create vs. the competition.
For the data center market, Mercury estimates AMD's 1Q23 revenues at $40 million, down 11% Q/Q and down 15% Y/Y vs. Nvidia's reported DC revenues of $4.28 billion, up 19% Q/Q and up 14% Y/Y, which includes revenues from Mellanox.
Also Read: Nvidia Vulnerable To In-House AI Chip Production By Google, Meta, Microsoft, Amazon
Price Action: NVDA shares traded lower by 3.75% at $388.04 on the last check Wednesday.
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