Nvidia drops over GPU concerns is a 'buying opportunity,' Morgan Stanley says
Sep. 25, 2023 11:09 AM ET
By: Chris Ciaccia,SA News Editor
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 Justin Sullivan
The recent decline in Nvidia (NASDAQ: NVDA) shares over potential concerns stemming from a large tech company cutting its requirements for the H100 GPU next year is a "buying opportunity," investment firm Morgan Stanley said.
Analyst Joseph Moore said the concern, whichwas caused by a recent filing believed to be from the Redmond, Washington-based Microsoft ( MSFT), is overblown.
"We can’t speak to specific budgets for next year for any one customer," Moore wrote in an investor note, adding that recent checks show demand "well above" supply for the H100 GPUs in several regions with several customers.
"Supply chain reports have Microsoft pushing for more product than they are currently getting, at least tactically, so we are very comfortable there isn’t a near term air pocket with that customer," Moore added.
Nvidia ( NVDA) sharesrose 0.8%in late morning trading on Monday but have declined roughly 9% over the past month.
In addition, Moore said Nvidia ( NVDA) now trades at a discount to other "AI centric names," such as AMD ( AMD), despite the fact it has more AI exposure than others. He also pointed out that other AI beneficiaries, such as Micron ( MU) and Marvell ( MRVL) are forecast a "sharp acceleration" in revenue, even with Nvidia starting to see some concerns about a plateau.
"The bottom line is that numbers are likely to continue to be strong, and to the extent that investors are concerned about near term demand that’s a good thing, as it is a negative thesis that the company can quickly disprove," Moore added.
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