NVIDIA (NASDAQ: $NVDA) CEO Unveils the B200, Its New Flagship AI Chip – Stock Rises 83%+ YTD

NVIDIA (NASDAQ: $NVDA) is a US semiconductor manufacturer based in Santa Clara, CA. It is the leading maker of higher GPUs and the global leader in AI chips, controlling around 80% of the global GPU market share.

On Monday, March 18, 2024, the company’s CEO, Jensen Huang, unveiled its new generation of AI chips, cementing its global leadership position in the space.

NVIDIA Launches Next-Generation AI Chips

The launch of the new AI chips and software took place at the company’s annual developer conference, with the goal of retaining the company’s dominance in the AI space.

CEO Jensen Huang unveiled their much-awaited Blackwell GPU in San Jose, CA. Blackwell is designed to be a successor to their highly successful H100 and H200 GPUs, and according to Nvidia, it is the most powerful chip in the world.

The H100 and H200 chips are prized in the AI industry, helping boost the company’s revenue in recent quarters to record highs. In its most recent quarterly report, Nvidia reported that its data center division, which oversees its AI chips, brought in $18.4 billion in revenue, amounting to 68.15% of its revenue in fiscal 2022.

How Blackwell GPUs Will Help NVIDIA Retain Its Competitive Edge

Nvidia’s biggest customers include Amazon, Microsoft, Google, Meta, and Tesla. However, these companies are actively working on in-house AI chips, partly because they will not have to for Nvidia’s expensive GPUs and partly because NVIDIA’s chips are extremely power-hungry.

The new Blackwell GPU is designed as a direct counter to these efforts. Like its predecessors, the Hopper GPUs, these new-generation chips can be paired up using the Grace CPU from Nvidia to create a GB200 Superchip.

With the setup, users can get up to 30x performance increase compared to the H100, at 25x less energy. A 25X energy saving is an important part of the value proposition. It will be more lucrative to purchase NVIDIA chips than to try to develop them in-house.

According to Nvidia, Google, Microsoft, Amazon, and Oracle will be among the first to provide customers access to the chips via their cloud platforms.

Other Product Launches

Nvidia also launched the DGX SuperPOD supercomputer system during the event. The new supercomputer comprises eight or more GB200 systems, which include 36 GB200 Superchips pairs to run as one computer unit. The DGX SuperPOD supercomputer can be scaled up to support tens of thousands of GB200 superchips, depending on the need.

The new supercomputer uses liquid cooling, which is infinitely more efficient than air cooling, reducing energy costs.

Nvidia’s GB200 Superchips will no doubt become a staple in the AI training industry once they hit the market. However, AMD and Intel will likely launch a competitor soon.

NVIDIA (NVDA) Stock Performance

NVDA’s share price has increased over 500% since OpenAI kicked off the generative AI race in late 2022. The company’s high-end GPUs have been crucial to the growth of the AI industry, and giant tech firms like Google and Microsoft have spent billions of dollars mopping up the chips.

The stock is up 83.64% year-to-date, rising by $402.87 to $884.55 per share. As such, it was no surprise that when the company unveiled its new product offering, the stock moved less than 1% in pre-marketing trading. Over the past 12 months, the stock is up 237.63%, compared to the S&P 500’s 28.64% gain in the same period.

Its current price is above its 50-day moving average of $708.78 and its 200-day moving average of $514.46. The stock is trading at a 9.18% discount to its 52-week high of $974.

NVDA Stock Forecast

Stock analysts forecast a broad target for the stock with a high of $1200 and a low of $608.40, giving the stock an overall strong buy rating. Their average target price is $913.74, a 3.30% upside based on the last closing price.  

Is NVDA Still a Buy?

Nvidia has managed to corner the AI chip market, accounting for 80% of all sales in the sector. In recent months, competitors Intel and AMD have announced plans to enter the AI market to compete with Nvidia. However, past market trends suggest dominant players in the semiconductor industry tend to retain a lead once they pull ahead.

Another factor to consider is that Nvidia is also a significant player in the PC industry. While inflation has dampened revenue from the sector in recent years, this is a temporary setback. As the sector recovers, the company could see revenue rise again from PC sales.

Based on the current market dynamics, especially the fast pace at which the AI sector is developing, Nvidia will likely continue to grow revenue in the near and medium term. Consequently, the strong buy rating accurately represents the company’s current and future performance.

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