Nvidia (NVDA) shares are falling today following the chipmaker's recent market highs. Hans Mosesmann, senior research analyst at Rosenblatt Securities, appeared on Market Domination to explain why he's not worried about the stock's volatility over the past few weeks. Mosesmann announced the highest price target for Nvidia on Wall Street.
Mosesman is taking a long-term view, explaining that the pressure to sell is negligible given that Nvidia is set to be “the best way to leverage AI” for the next decade. He adds that Nvidia is no longer just a semiconductor company, but a platform “for all things AI.”
For more expert insights and the latest market trends, click here to watch this entire episode of Market Domination.
This article was written by Gabriel Roy
Video Transcript
Media shares are backing off today.
A IA I market favorites are falling further from the highs they hit not long ago.
But our next guest isn't worried about NVIDIA's rocky road in recent weeks.
He has a buy recommendation on the stock and his target price is the highest on the market.
I want to bring in Hans and Moses the guy.
He is a senior research analyst at Rosenblatt Securities.
I'm glad you came here.
If we look at the volatile past few weeks for NVIDIA, some of that has put a lot of pressure on the stock price.
Why isn't that a concern?
Well, it's new territory for NVIDIA.
Well, you know, valuations have been calculated from almost nothing in the last year.
Uh, so this move was kind of, uh, people need to understand how they work and how that's possible and what's going on with AI and what the leadership position is in AI.
It might be a little shaky, but if you look at it from a long-term perspective over the next 10 years, this is going to be the way to leverage AI. AI is on another level, and I think people need to get used to it. AI is no longer a semiconductor company.
These are platforms, they're about AI and Hans, and if you're excited about the two Hans from NVIDIA, you're also excited about the larger megatrend of AI, so you really should think of this as a paradigm shift.
Well, Jensen Wong is right when he talks about how the next industrial revolution will begin, Hans.
Yes, that's right.
So there are some moving parts, and the cloud, which is a big part of Nvidia's business, won't be the home of all AI, because over time we'll see more AI running not in the cloud, but at the mid edge, the far edge, opening the door to more efficient solutions in terms of platforms, hardware and even software.
So there are other players who will benefit from that transition, including the A's, the D's, the Arm, a little company we cover called Lady.
Well, there are other participants, but in terms of value capture in AI, NVIDIA may lose standalone market share, but they may actually gain value, because they are monetizing the entire stack, which is the entire rack, the entire software that surrounds it.
So it's a great model and I think people still don't fully understand that, as you said, NVIDIA is no longer just a chipmaker.
It's really about AI that's catching the attention of regulators around the world.
Then earlier this week, Reuters reported that France was considering the possibility of the media company facing antitrust charges in France.
I'm curious to see how analysts are assessing that risk from an analyst perspective and how much of a worrying headwind this could ultimately be for the stock price.
Well, I think NVIDIA's competitors and NVIDIA observers and countries are worried about a company that is capturing and capturing all of this value.
So sometimes there is a knee-jerk reaction to stop what has already been endured.
The U.S. has basically put these restrictions on China and 20-25% of their business has basically disappeared and they are still sold out.
So, that's something to note, but they're not predatory.
And at least it's not the price of chips or rackboards that's driving this business, although prices are rising.
It's value delivered through total cost of ownership.
This is a different metric that we in the semiconductor industry are not used to.
right.
Doubling the price of this product will give you a much better TCO, better performance per watt, per cubic foot, and per dollar, benefits that no one else can match.
right.
It's not that there's anyone else who can do it, and MD might get some share here, but it's a little bit different.
But certainly, what is monitored in France is the kind of things that raise eyebrows and so on.
But at this point, I don't think it will lead to anything because they are fair with how they price their products.
In my opinion, Hans, you know, Jensen, as they build out this platform and Hans goes into new areas, new verticals, I think there are companies to worry about.
Well, the traditional way of doing things in silicon is changing and the so-called general purpose server market is really being disrupted in terms of value by moving into an acceleration cycle.
So companies like Intel, Company A, and Company D would be in trouble if they didn't have GP U, for example.
Well, they're changing the way computing is done.
For example, if you look at the cloud, the next wave of value capture for NVIDIA will be in the networking and storage areas.
And then we start to embrace those areas from a value perspective, taking full advantage of the interface between the network and the storage and the computer — high-speed computing.
So I think the traditional network players and storage players are probably going to have to deal with this.
There are ways around that. For example, you know, the big players in the networking industry, Broadcom and Marvel, have the ability to build custom chips.
So some of the hyperscalers don't want to use NVIDIA all the time and want to build their own custom, highly efficient and very expensive accelerators.
And then there's another kind of theme that's kind of the opposite of that, but it's interesting when you look at Nvidia's roadmap, they're trying to get not just GPU compute, but the whole rack and everything that goes inside the rack, and the data center hands. We're seeing more talk about competitors in this space, and even looking at Mikron, there's certainly a lot of tension here.
I'm curious what you think about that comparison and, more specifically, the price movement we've seen in Micron since the earnings report, what you think the market is missing given your bullish theory.
So my top two stocks for the year are the ones that have been a little bit underperforming here, the A's and D's and the micro stocks.
In other words, Milon is a supporter.
Well, they're not competitors, it's NVIDIA.
So Micro is offering very useful, basic memory, like the more commoditized DDR 5 and this new high bandwidth memory that the industry is constrained by right now, that will probably be sold out for the next year, maybe a year and a half.
So NVIDIA needs Mikron, Samsung and Hex to ramp up production and get their hands on eels, right?
MD is more of a competitor and came out of nowhere. MD is backed by hyperscalar, Broadcom, and networking companies. As you can see, a battle of the titans has erupted where many of the hyperscalar chip companies in the industry feel threatened by NVIDIA and are teaming up to fight a Godzilla-like entity.
Well, NVIDIA is what we call the green, green monster.
That's just the way things unfold.
It's going to be a battle that will continue for a very long time.
But I think NVIDIA has the advantage here.
Over time, as we know, Apple and the iPhone and its ecosystem will battle with Android and in a way coexist.
Hmm, but I guess that's just the way Hans does things.
Thank you for being on the show today.
Thank you for making time for us.
I got it.
