Nvidia (NASDAQ:NVDA) stock recently hit an unexpected snag in its otherwise unstoppable rise. The delay in shipments of its new Blackwell GPU architecture, caused by a design flaw, has sparked concerns that the AI chip giant’s market position could be affected.
However, the stock’s dip was short-lived, which comes as no surprise to Morgan Stanley analyst Joseph Moore. “Nvidia stock has largely shrugged off concerns around potential Blackwell delays – correctly so, in our view, as near-term business is strong and we will still see Blackwell ramp this year as per initial guidance,” the 5-star analyst opined.
Just ahead of Nvidia’s FQ2 earnings release scheduled for tomorrow (August 28), Moore also reminds investors that Blackwell wasn’t intended to play a significant role until the January quarter. “We expect initial volumes in the October quarter, as the initial product is functional but with somewhat lower yields, and we still expect a volume ramp of the next revision of silicon through January – all of which is still within the broad brush strokes of guidance,” Moore went on to explain.
In any case, as both supply and customer demand have quickly transitioned to the H200, the timing shift isn’t particularly significant. In the cloud sector, Hopper demand is “exceptionally strong,” and it should be noted that for internal workloads, hyperscalers will require large clusters of Blackwell to achieve “relevant outcomes.” As such, some customers have preferred to secure more Hoppers, as supply has begun to taper off.
Moore also expects a meaningful contribution from the H20, the modified version of Hopper intended to meet the lower technology thresholds required for export to China under current controls. Based on Moore’s recent Asia checks, the analyst reckons H20 builds have risen to around 1.2 million units for the year, with an average selling price of $13-15k. While it’s uncertain if all of these units will sell, going by to discussions with Chinese hyperscalers, demand for H20 seems robust. Therefore, over the next three quarters, Moore anticipates the H20 could generate over $10 billion in revenue.
So, what does this ultimately all mean for investors? Moore rates NVDA an Overweight (i.e., Buy), along with a $144 price target. That figure offers a one-year upside of 12% from current levels. (To watch Moore’s track record, click here)
It’s mostly Buys amongst Moore’s colleagues, too – 32, in total – while the addition of 3 Holds can’t detract from a Strong Buy consensus rating. At $149.89, the average price target suggests shares will climb ~17% higher in the year ahead. (See Nvidia stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
