KUALA LUMPUR, March 14 (Bernama) -- The FTSE Bursa Malaysia KLCI (FBM KLCI) ended the week slightly higher, in line with regional indices despite the weaker performance on Wall Street overnight. At 5 pm, the FBM KLCI rose 2.12 points or 0.14 per cent to 1,512.15 from Thursday’s close of 1,510.03. The market bellwether opened 10.08 points lower at 1,499.95, and moved between 1,493.29 and 1,516.25 throughout the day. On the broader market, gainers outpaced losers with 680 to 292, while 437 counters were unchanged, 1,009 untraded, and 13 suspended. Turnover was marginally lower at 3.24 billion units worth RM2.5 billion from 3.25 billion units worth RM2.90 billion on Thursday.
Nvidia Corp. shares have recently rebounded, but one analyst believes the real key to a sustained recovery lies not in artificial intelligence (AI) spending, but in the company’s gross profit margins.
Key Takeaways:
Focus on Gross Margins: While Wall Street worries about potential lower spending on AI infrastructure, Vivek Arya, an analyst at Bank of America (BofA), argues that Nvidia’s gross margins are the real focus for investors. He pointed out that Nvidia’s stock peaked last year around the same time gross margins hit 79%, which was unusually high.
Current Margin Trends: In the latest quarter, Nvidia’s gross margin was 73%, impacted by the transition to its new Blackwell product line. Arya expects this to be a trough and forecasts margins will improve to the mid-70% range in the second half of the fiscal year.
Market Position: Despite increased competition from companies like Broadcom, Arya believes Nvidia will maintain an 80% to 85% market share for AI server chips.
Upcoming Developments: Arya anticipates that Nvidia’s GTC conference next week will highlight updates on its future product lineup, including the Blackwell Ultra line and the Rubin product family, along with long-term opportunities in areas like autonomous cars and quantum computing.
Stock Rating: Arya maintains a buy rating on Nvidia with a $200 price target, signaling confidence in the company’s future performance despite short-term challenges.
Comments
Post a Comment