NVIDIA and Goldman Sachs' Consensus: The next focus of AI trading is a major upgrade for PCs!
Goldman Sachs stated in a research report that the upgrade cycle in the technology hardware industry has completely ended with the escalation of the pandemic. With the advent of the AI wave, upcoming PC and mobile device models will have significant new features such as AI enhancement, improved security, and stronger computing capabilities, heralding a new wave of upgrades. NVIDIA CEO Jensen Huang also mentioned that agreements have been reached with two PC manufacturers to integrate AI chips into future products
Recently, the sales of personal computers have been continuously declining, but analysis suggests that this decline is expected to end next year. As AI chips begin to be integrated into new personal computers and laptops, consumers' interest in upgrading will be reignited. PC upgrades will become the "next AI trade", with AI chips running in the background as digital assistants, providing users with faster computing capabilities.
Due to the remote work demand caused by the COVID-19 pandemic, PC sales peaked at the end of 2021, but have been lackluster ever since, waiting for AI to come to the rescue. Jensen Huang, the CEO of NVIDIA, which dominates the AI chip field, announced at the Taipei International Computer Show that NVIDIA has reached agreements with PC manufacturers ASUS and MSI to integrate AI chips into their new products.
Huang Renxun stated,
"Your future laptops will continuously assist you in the background. Personal computers will run AI-enhanced applications, from writing and photo editing to AI-driven digital assistants."
ASUS and MSI have not provided a timetable for the launch of these new PCs and laptops. However, once they are released, it is expected to trigger a wave of AI PC upgrades, driving sales of tech hardware stocks.
Huang Renxun also mentioned that NVIDIA plans to upgrade its AI accelerators annually and announced the launch of the Blackwell Ultra chip in 2025, as well as a next-generation platform named Rubin in 2026. NVIDIA has also introduced new tools and software models. He views the rise of generative AI as a new industrial revolution.
Goldman Sachs also predicted this in a research report titled "The Next AI Trade: PC AI Upgrades". Analyst Faris Mourad from Goldman Sachs stated that the tech hardware industry is preparing for a new takeoff after reaching its peak during the pandemic upgrade cycle. "During the pandemic, most employees working from home purchased devices, leading to a peak in the tech hardware upgrade industry. This cycle has now completely ended, and we have noticed stocks like HPQ have already reached 9 times the expected earnings for 2025.
He expects that most PCs purchased during the pandemic will soon be replaced, and upcoming models of PCs and mobile devices will have significant new features such as AI enhancement, improved security, and stronger computing capabilities,
"This will motivate American consumers to spend more on new devices than ever before, creating an exceptionally strong cycle."
Mourad revealed that Goldman Sachs has created the "New Device AI Upgrade Index" (GSXUPCAI) to help clients seize the opportunity of the AI PC upgrade cycle. The analyst stated that the index consists of tech hardware stocks that may benefit from PC and mobile device upgrades and may include AI features. The index can have a daily trading volume of up to $250 million, with no individual stock exceeding 10% of the average daily trading volume Data shows that GSXUPCAI is catching up with Goldman Sachs' AI Software and Hardware Index (GSTMTAIP).
Compared to the Nasdaq and the AI Software and Hardware Index GSTMTAIP, the valuation of the new GSXUPCAI AI Upgrade Index is still the lowest, but the gap is narrowing.
