KUALA LUMPUR, March 17 (Bernama) -- Bursa Malaysia extended gains to a third consecutive session today, driven by broad-based buying across various sectors following the recent strong sell-off, in line with the performance of regional markets, an analyst said. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose by 15.66 points, or 1.04 per cent, to 1,527.81 from Friday’s close of 1,512.15. The benchmark index opened 5.43 points firmer at 1,517.58 -- its intraday low -- and peaked at 1,531.63 during the mid-morning session and maintained its momentum throughout the afternoon session. On the broader market, gainers thumped decliners 708 to 297, while 425 counters were unchanged, 994 untraded, and seven suspended. Turnover improved to 3.28 billion units worth RM2.40 billion from 3.24 billion units worth RM2.5 billion on Friday.
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.
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