Wall Street Maintains Optimistic Outlook on Nvidia Despite Intensifying AI Chip Competition with Google

(Seoul=Yonhap Infomax) Kyung Pyo Hong – As competition intensifies to secure dominance in the AI chip sector, Wall Street analysts remain optimistic about Nvidia Corp. (NASDAQ: NVDA).

According to CNBC on the 25th (local time), Stacy Rasgon, analyst at Bernstein, stated, "GPUs are certainly not going away."

He added, "The most pressing issue right now is the shortage of computing resources, and the current competition seems more like a race to secure additional computing capacity."

Nvidia shares declined after reports emerged that Meta Platforms Inc. is considering using Google’s Tensor Processing Units (TPUs) in its data centers.

The fact that hyperscalers are evaluating Google’s TPUs as alternatives to Nvidia’s GPUs has exerted downward pressure on Nvidia’s stock price.

TPUs are ultra-high-performance custom chips (ASICs) and are often more power-efficient than GPUs, which are general-purpose chips designed for a wide range of computing workloads.

Bernstein noted that, as Nvidia remains the market leader in GPUs, Google’s TPUs are not expected to pose an immediate threat.

Rasgon commented, "I think the question of ASIC versus GPU still misses the point. What matters is whether the opportunity ahead of us remains significant."

He further stated, "The AI hardware market is not yet mature or saturated, and if the market is large, both GPUs and ASICs can succeed."

Vivek Arya, analyst at Bank of America (BofA), also expressed optimism about the future of Nvidia’s GPUs.

BofA explained that while TPUs are intensifying competition, the AI data center market is still in its early growth phase.

Arya projected that the total AI data center market size will grow from $242 billion by the end of this year to over $1.2 trillion by 2030, representing nearly a fivefold increase.

Nvidia closed the previous session down 2.59% at $177.55.