Nvidia ticks up as Wells Fargo sees DGX B200 pricing news as a positive
Nvidia shares rose 1% in premarket trading after Wells Fargo viewed reports of the DGX B200 pricing at $200,000 or more as a positive sign. Analyst Aaron Rakers noted that while actual pricing may vary, the 40% increase over the DGX H100 systems could exceed expectations and alleviate concerns about Nvidia's gross margins. With the first DGX GB200 systems being delivered to OpenAI and Microsoft, demand is crucial for investors. Rakers maintains an Overweight rating and emphasizes the importance of data from partners like Foxconn and Quanta.
Nvidia (NASDAQ:NVDA) shares rose 1% in premarket trading on Monday as Wells Fargo called media reports that the semiconductor giant will price its DGX B200 systems at $500,000 or more as an "incremental positive."
"While we think it is always important to consider that actual pricing can differ from list prices, and we continue to believe it is difficult to drive NVDA estimates solely on system price x quantity (e.g., NVIDIA's expanding platform monetization a key / underappreciated input), we do think the 40%+ higher pricing of the DGX B200 vs DGX H100 systems could be considered higher than expectations," analyst Aaron Rakers wrote in a note to clients. "We think this level of pricing could also ease any concern over NVDA's [gross margin percentage] dynamics."
And with Nvidia delivering its first DGX GB200 systems to OpenAI and Microsoft (MSFT), demand is likely to be paramount for investors, Rakers said. He has an Overweight rating and $165 price target on Nvidia.
"As we move into NVDA's Blackwell platform cycle, we expect investors to be particularly focused on NVDA's GB200 NVL72 rack scale demand," the analyst explained. "We continue to think that data points / comments coming out of key partners such as Foxconn and Quanta as some of the early indicators."