Nvidia's Blackwell ramp appears 'quite strong,' Morgan Stanley says
Nvidia's upcoming Blackwell GPUs are showing a strong production ramp, according to Morgan Stanley. Despite a 0.8% drop in premarket shares, analyst Joseph Moore remains optimistic, predicting Nvidia will gain AI processor market share by 2025. Issues with initial Blackwell production have been resolved, and Nvidia expects significant revenue from Blackwell in the January quarter. The company is also confident in securing Samsung as a third supplier for HBM3e, alleviating supply concerns.
Nvidia (NASDAQ:NVDA) is gearing up to launch its Blackwell line of GPUs and the ramp up in production appears "quite strong," Morgan Stanley said on Thursday.
Shares fell 0.8% in premarket trading.
There appear to be no major changes to product roadmaps and every indication is that business is "robust" and there is high visibility going forward, analyst Joseph Moore said in a note to clients, after meeting with Nvidia management, including Chief Executive Officer Jensen Huang.
"Our view continues to be that NVIDIA is likely to actually gain share of AI processors in 2025, as the biggest users of custom silicon are seeing very steep ramps with NVIDIA solutions next year," Moore wrote. "Everything that we heard this week reinforced that."
Moore reiterated his Overweight rating and $150 price target on Nvidia.
Nvidia management provided added color on the initial Blackwell ramp delays, which caused a stir over the summer. The first version was functional, but yields were low, with the problems mostly discovered post packaging.
As such, there was a loss of chip-on-a-wafer substrate and HBM3e, which are both in short supply, compounding the issue. However, those issues are behind Nvidia, and Moore said there is "high conviction in prior guidance that they will have several billion in Blackwell revenue in the January quarter."
On top of that, there is no concern about HBM3e supply, as Nvidia said it feels "highly confident" it will qualify Samsung (OTCPK:SSNLF) to be its third supplier, Moore wrote.