NVIDIA today
(As of 2:22 p.m. ET)
- 52 week range
- $45.41
▼
$152.89
- Dividend yield
- 0.03%
- P/E ratio
- 57.09
- Target price
- $164.15
Reports that NVIDIA NASDAQ: NVDA could make its Blackwell chips resonate throughout the semiconductor industry. The news is good for many reasons, but there are obstacles and risks to overcome. The good news is that the path to expanding production at Blackwell and reducing geopolitical risks is clear. The bad news is that Taiwan Semiconductor Plant New York Stock Exchange: TSM is not 100% capable of producing chips in the United States, at least not yet.
Promotion of NVIDIA and ramping up Blackwell production
Moving NVIDIA chip production is in the national interest and reduces geopolitical impact on China, but this is not possible under this deal. TSMC’s Arizona facility is state-of-the-art but not equipped to produce CoWoS, or chip-on-wafer-on-substrate, packaging, a proprietary process designed for high-intensity computing and artificial intelligence needs. This means that Blackwell’s chips will have to be sent to Taiwan for modification, which will bring geopolitical risk and many others back into the equation, but there is hope.
TSMC received $6.6 billion in CHIPS Act funding as part of its overall $65 billion investment plan. The money will be used to build new facilities, including a new CoWoS facility critical to supporting Blackwell’s manufacturing. The company is already considering opening new factories in Japan and the US to meet increased demand and plans to double its production capacity more than once by 2026.
There is hope that we will come to an agreement Amkor NASDAQ: AMKR will meet NVIDIA’s needs between then and now. Amkor is a global chip packaging services provider and will perform CoWoS at its Arizona facilities. Earlier this year, TSMC and Amkor signed an agreement, and plans for the construction of the first production facilities have already been determined. Among the early TSMC customers likely to benefit are: Advanced microdevices NASDAQ: AMDNVIDIA’s most significant competitor in GPUs and AI processors, and Apple NASDAQ:AAPL. The bad news is that the first phase won’t be completed until 2027 or later, with the final phases scheduled to open in the middle of the next decade.
NVIDIA will surprise the Rubin market in 2025
Rumors are growing that NVIDIA will surprise the market and release the next generation of artificial intelligence technology six months earlier than expected. This news adds to the uptrend in stock prices and is likely to lead to continued data center upgrades over the long term. Rubin is expected to achieve better results with its AI-centric architecture, TSMC’s advanced 3nm manufacturing process and next-generation HBM4 memory. The chips are expected to be more powerful, store exponentially more data and operate more efficiently than their predecessors. NVIDIA is also collaborating with Schneider Electric to develop innovative cooling solutions for its leading-edge GPUs and processors.
MarketBeat doesn’t track analyst activity related to TSMC/Arizona news, but the group is active in 2024 and the trends are positive. Analyst coverage is growing; Sentiment is strong with a strong buy and consensus price target increasing. In November alone, the target price increased by almost 15%, and the revision led to even higher prices. Consensus suggests an upside of about 15% from the critical support target, while the upper level adds another 25%.
At the end of 2024, price action will be bullish, with stocks reaching new all-time highs and showing support at critical levels. The critical level coincides with the previous all-time high and the top of the consolidation range. The next big move will likely be higher, with a critical resistance target near $150. A move above this level would likely spark fresh upside momentum and lift the market into the $190 to $200 range.
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