Shares of Nvidia ( NVDA ) are falling back today after the chipmaker's recent market highs. Hans Mossman, senior research analyst at Rosenblatt Securities, joins Market Domination to explain why he's not worried about the stock turmoil of the past few weeks. Mosesmann has issued the highest price target for Nvidia on Wall Street.
Mosesmann has a long-term view, explaining that selling pressure is negligible when one considers that Nvidia will be “the best way to play AI for the next 10 years.” He added that Nvidia is no longer just a semiconductor company but a platform that is “everything AI.”
For more expert insights and the latest market action, click here to watch this entire episode of Market Domination.
This article was written by Gabriel Roy.
Video transcript
The media section is retreating today.
A IA I The market darling is falling further from the record highs it reached not long ago.
Although our next guest isn't worried about the bumpy road we've seen for NVIDIA over the past several weeks.
It has a buy rating on the stock, the highest price target on the street.
We want to bring Hans and Moses.
He is Rosenblatt Securities, a senior research analyst.
It's great to have you here.
So when you take a look at what's certainly been somewhat volatile for NVIDIA, some of that selling pressure on the stock is overwhelming.
Why isn't this bothersome to you?
Well, I, we're entering new territory for NVIDIA.
Um, you know, it's been almost a little bit less over the last year.
Uh the move has been so you know what people did, how it's possible and for that you have to understand what's going on with the AI and their leadership position.
So it might be a bit messy, but from a secular point of view for the next 10 years, it's going to be a way to play AI, they're on another level and I think people are just going to have to get used to it. And they are no longer a semiconductor company.
They're a platform, they're all things AI and Hans, you know, I'm assuming, if you're bullish on NVIDIA Two Hans, you should be bullish on just the big megatrend of AI, that. You should think, you know, yeah, it's a paradigm shift.
And yes, Jensen Wong is right when he talks about, you know, how the next industrial revolution started, Hans.
Yes, that is correct.
So there are some moving parts and so the cloud, where most of Nvidia's business is, is not going to be the home of all things AI, because over time more AI happens, not in the cloud. , but in the mid-edge, the far-edge and this platform opens the door to more efficient solutions in terms of hardware and even software.
So there are other players that will benefit from this transition like arms like A and D, uh, a small company called Lady that we cover.
Oh so there are other participants, but in terms of AI value capture, NVIDIA may lose unit market share, but they may actually gain value because they're, they're, they're monetizing the whole stack, it's There is, the whole rack, the whole software that goes around it.
So it's a great model that I think people have yet to fully understand what you said there just a minute ago is that NVIDIA is no longer just a chip maker.
It's all things AI that has really caught the attention of regulators around the world.
And earlier this week, we got a Reuters report that France is actually looking into it, and the media is facing possible antitrust charges in France.
I'm curious as to how you're assessing this risk from an analyst perspective and how disruptive it could ultimately be for the stock.
Yes, I think NVIDIA's competitors and NVIDIA's observers and countries are concerned about a company capturing, or capturing, all that value.
So in some cases there's a knee-jerk reaction to stop what they've already endured.
America basically with these restrictions on China, 20 25% of the business is basically gone and they are still basically sold.
So it's something to watch, but they're not being predatory.
And at least, even though prices are rising, it's not the chip price or the rack board that's driving the business.
It is the value generated by the total cost of ownership.
This is a different metric that we are not used to in the semiconductor industry.
Okay fine.
You can double the price of this product and it delivers significant tco you know, performance per watt per cubic foot per dollar benefits that no one else can match.
Okay fine.
It's not like there's another guy who can do it, maybe an MD can play a part here, but it's, it's a little different.
But yes, it's a surveillance thing in France that raises eyebrows etc.
But at this point, I don't think it's going to lead to anything because they're being, they're being fair in terms of how they price their products.
In my opinion, Hans, as you know, you know, is Jensen, this platform is built because he expands Hans, you know, he moves into new areas, new vertical companies that You should be concerned about
OK, so the traditional way of doing things in silicon is changing so that, ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, .
So, you know, Intel and even people like A and D, if A and D don't have GP U, for example, they're going to be in big trouble.
Uh, so they're changing the way computing is done.
And so the next wave where the value capture is for NVIDIA, if you look at the cloud for example, is the networking areas, the storage areas.
And so you, you start to kind of bring these areas in terms of value and you maximize the interface between networking and storage with computers, accelerated compute.
So I think traditional networking oh players and storage players probably have to deal with that.
There are ways to get around that, for example, Broadcom and Marvel who are, you know, big players in networking, have the ability to do custom chips.
And so some hyperscalers don't want to use NVIDIA all the time, they want to build custom, very efficient, very expensive accelerators.
And so there's another kind of theme that goes against that, but it's interesting if you look at Nvidia's roadmap, how they expect to not just GPU the compute, but the entire rack and everything. which goes into it. rack and, and a data center goose, there's been more and more talk about some of the competitors within this space, even when you take a look at Mikron, there's definitely been a lot of tension here. .
I want to know what you think about that comparison and then, in particular, some of the price action that we've seen on Macron since his earnings report, your bullish thesis there. Which street is missing from the view?
So my, my top two picks for this year are the ones that have been underperforming here, for a while Uh A and D and Micro.
So Marion is an active.
Oh they're not a competitor, it's NVIDIA.
So those micros provide very useful and basic memory, whether it's DDR5, which is more commoditized, or this new high-bandwidth memory that the industry is currently limited to, maybe sold for the next year, maybe a year. And a year. half
So NVIDIA needs Mikron and Samsung and Hex, to boost their production, get their eel, right?
An MD is a competitor and is not coming from anywhere and an MD is being helped by hyperscalers and Broadcom and some networking guys, as you can see the emerging battle of the titans where a lot of the industry, hyperscalers. The chip companies that feel threatened by NVIDIA are sort of teaming up to do battle with what I would call, you know, like Godzilla, a figure here. like
Uh when NVIDIA says, you know the green, green monster, if you will.
So how are things like this going?
It will be a war that will last for a long time.
But I think NVIDIA has the advantage here.
Over time, you can think of it as, you know, an apple with the iPhone and the ecosystem that's at war with Android, they kind of co-exist.
Um but uh in this way, I think it can play Hans.
Great to have you on the show today.
Thanks for taking the time for us.
You got it.