The “most bullish thing” UBS heard Nvidia say
Nvidia’s robust rally following its earnings report and management’s conference call is proof enough that investors are picking up what Jensen Huang and co. are putting down.
But what exactly is engendering enhanced optimism about the state of an AI boom that is already well in bloom?
Well, here’s UBS Securities analyst Timothy Arcuri, who has a “buy” rating and $175 price target on the shares, on what stuck out the most to him:
“The most bullish thing we heard on this call was that, ‘on average, hyperscalers are each deploying nearly 1000 NVL72 racks, or 72,000 Blackwell GPUs per week’ and are ‘on track to further ramp output this quarter.’ When queried, management again affirmed that this is 1k racks PER week PER hyperscaler. This is much higher than almost all estimates regarding rack shipments and implies a run rate of at least 10k/month — a number that seems too high to use, but makes the point that racks are really taking off.”
In other words, the newest racks (which required some tweaks earlier in the year to solve overheating issues) are now flying off the shelves and into data centers at a rapid pace.
Arcuri’s observation related to these remarks from CFO Colette Kress on the conference call:
“The introduction of GB200 NVL was a fundamental architectural change to enable data-center-scale workloads and to achieve the lowest cost per inference token. While these systems are complex to build, we have seen a significant improvement in manufacturing yields, and rack shipments are moving to strong rates to end customers. GB200 NVL racks are now generally available for model builders, enterprises, and sovereign customers to develop and deploy AI.
On average, major hyperscalers are each deploying nearly 1,000 NVL72 racks or 72,000 Blackwell GPUs per week and are on track to further ramp output this quarter. Microsoft, for example, has already deployed tens of thousands of Blackwell GPUs and is expected to ramp to hundreds of thousands of GB200s with OpenAI as one of its key customers.”
