Chipmaker Nvidia (NVDA) is facing new scrutiny following its recent, and relatively unknown, purchase of SchedMD. Notably, this is the company behind Slurm, a widely used open-source software tool. Slurm is important because it helps manage computing tasks in AI data centers and supercomputers, including those that are used to train large AI models. It is also used in government systems for things like weather forecasting and defense. Since Slurm powers about 60% of the world’s supercomputers, Nvidia’s control over it has some experts worried about how Nvidia might handle future software updates.
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Forget margin or options. Here's how the pros trade NVDAIn particular, there is the concern that Nvidia could prioritize its own chips over those made by rivals. For example, updates could be designed to work better or arrive faster for Nvidia hardware, which would give it an advantage. In fact, some people point to Nvidia’s earlier purchase of Bright Computing as a reason to be worried, since that software ended up working better with Nvidia hardware over time.
However, some users believe that Nvidia could improve Slurm by investing more resources into it, especially since the system has not seen major updates in years. In addition, Nvidia has responded by saying that Slurm will remain open-source and that improvements will benefit everyone. Still, how Nvidia manages Slurm could ultimately have a big impact on competition across the AI industry.
What Is a Good Price for NVDA?
Turning to Wall Street, analysts have a Strong Buy consensus rating on Nvidia stock based on 41 Buys, one Hold, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average Nvidia price target of $273.57 per share implies 54% upside potential.
