Datasection of Japan Signs GPU Server Deal with Compal Electronics
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6 days ago
0mins
Should l Buy NVDA?
Source: seekingalpha
- Significant Contract Value: Japan's Datasection has signed a contract with Compal Electronics to acquire 635 GPU servers equipped with Nvidia's B300 processors for a total of $325 million, indicating a robust growth in demand for high-performance computing.
- Positive Market Reaction: Following this announcement, Nvidia's shares saw a slight increase in premarket trading, reflecting optimistic market expectations regarding product demand, which could further stabilize the company's stock price.
- Prospects for Technical Collaboration: This deal not only enhances Datasection's computing capabilities but may also facilitate Nvidia's deeper penetration into the Japanese market, thereby boosting its competitiveness in the global semiconductor industry.
- Industry Trend Guidance: With the rising demand for GPU servers, industry analysts suggest this could signal a strong recovery in the semiconductor market, particularly as applications in AI and data processing continue to expand.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 220.780
Low
200.00
Averages
264.97
High
352.00
Current: 220.780
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is an artificial intelligence (AI) infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. Its segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing and networking platforms and AI solutions and software, and automotive platforms and autonomous and electric vehicle solutions, including software. The Graphics segment includes GeForce GPUs for gaming and personal computers (PCs), and Quadro/NVIDIA RTX GPUs for enterprise workstation graphics. Its technology stack includes the foundational NVIDIA CUDA development platform that runs on all NVIDIA GPUs, as well as hundreds of domain-specific software libraries, frameworks, algorithms, software development kits (SDKs), and application programming interfaces (APIs). Its platforms address four markets, which include Data Center, Gaming, Professional Visualization, and Automotive.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Continued Growth Trend: The company anticipates an 11% quarter-over-quarter sales increase in Q2 FY2027, reaching $89B, primarily due to the ongoing ramp of B300 and faster-than-expected shipments of 1.6 trillion transceivers, solidifying its market position.
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- Continued Growth Trend: The company anticipates an 11% quarter-over-quarter sales increase in Q2 FY2027, reaching $89B, primarily due to the ongoing ramp of B300 and faster-than-expected shipments of 1.6 trillion transceivers, solidifying its market position.
- Strong GPU Demand: Nvidia has only missed consensus estimates by more than $1B three times in the past 12 quarters, with CEO Jensen Huang describing the demand for their GPUs as “insane,” highlighting the company's strong appeal in high-performance computing.
- Sales Forecast Revision: Citi has raised Nvidia's FY2027 sales forecast to $284B, reflecting a 79% year-over-year increase, with AI GPUs expected to account for 70% to 80% of total data center sales, showcasing the company's strategic advantage in AI and data processing.
See More
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- Market Share Advantage: Nvidia holds a 92% share of the GPU data center market, and with global AI infrastructure spending projected to reach $7 trillion by 2030, this will further solidify its market leadership and drive sustained growth for the company.
- Future Revenue Expectations: Nvidia anticipates first-quarter revenue of $78 billion for fiscal Q4 2026, with total revenue expected to reach $922 billion over the next seven quarters, indicating strong growth potential and market confidence.
- Stock Price Forecast: Should Nvidia achieve $621 billion in revenue by 2027, its stock price could surge by 252% to $640, resulting in a market cap of approximately $15.5 trillion, reflecting optimistic market expectations for its future performance.
- Accelerated Innovation Cycle: By shortening its GPU update cycle to 12-18 months compared to competitors' 3-5 years, Nvidia's rapid innovation capability will help maintain its lead in the AI sector, further boosting investor confidence.
See More
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- Collaborative AI Development: Nvidia has partnered with British startup Ineffable Intelligence to focus on reinforcement learning, aiming to develop AI systems that learn from experience, thus pushing the next frontier of AI.
- Funding Background: Founded in 2025, Ineffable Intelligence secured a record $1.1 billion in seed funding in April, with participation from notable investors like Nvidia, Sequoia, and Lightspeed, indicating strong market confidence in its technology.
- Innovative Technical Direction: Unlike traditional AI models, Ineffable will emphasize training through rich experiences, potentially requiring novel model architectures and training algorithms to tackle the more complex challenge of AI discovering new knowledge independently.
- Engineering Collaboration: Engineers from both companies will collaborate to build infrastructure for large-scale reinforcement learning, utilizing Nvidia's Grace Blackwell chips and Vera Rubin platform to enhance the continuous learning capabilities of AI systems.
See More
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- Target Price Increase: Wells Fargo raised NVIDIA's target price from $265 to $315 while maintaining an Overweight rating, indicating that the stock may still appear undervalued ahead of the upcoming quarterly report.
- Earnings Outlook Analysis: Utilizing a new model that links AI demand to global data center expansion, Wells Fargo suggests that NVIDIA's earnings outlook for 2027 may be more sustainable than peak-cycle estimates, highlighting the company's future growth potential.
- Market Competition Pressure: While Wells Fargo acknowledges concerns regarding market share and margins due to pressure from rivals and custom silicon, it still believes NVIDIA's stock trades at less than 20 times its 2027 earnings forecast, indicating investment value.
- Stock Performance: NVIDIA's stock has gained approximately 18% this year and about 77% over the past 12 months, and Wells Fargo's analysis adds to the ongoing debate about whether the company's growth is still undervalued, potentially influencing investor decisions.
See More
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- Apple's Strong Ecosystem: Daiwa raises Apple's price target from $310 to $325, emphasizing its vast ecosystem as a core strength, while acknowledging potential memory management challenges in 2H CY26, the long-term outlook remains favorable for this core holding.
- Positive Outlook for Housing Platform: UBS upgrades KE Holdings to buy from neutral, citing significant upside due to its agency business in tier 1 cities, particularly as the market recovery is led by the secondary market, positioning the company for strong performance.
- Wendy's Potential Privatization: Argus upgrades Wendy's to buy from neutral, driven by news of a potential move to take the restaurant chain private, with Trian Fund Management owning about 40% of the stock, indicating strong market confidence in this strategic shift.
See More
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- Inflation Surge: The latest data reveals that the US Consumer Price Index rose at its fastest pace in nearly three years last month, with an annual increase of 3.8%, significantly above the Federal Reserve's 2% target, indicating widespread price pressures on consumers.
- Energy Price Spike: Driven by the Iran War, energy prices surged by 3.8% in April and are up nearly 18% year-over-year, which not only exacerbates inflationary pressures but may also lead to reduced consumer spending, potentially impacting overall economic growth.
- Shifts in Fed Policy Expectations: As market participants increasingly rule out interest rate cuts before 2027, they are raising the odds for a rate hike by year-end, which could negatively affect stock market sentiment and lead to cautious investor behavior.
- Box Office Recovery: The domestic box office posted $161.2 million in ticket sales over the weekend, an increase of nearly 88% year-over-year, and while overall box office remains below 2019 levels, the summer is expected to continue strong sales, reflecting a gradual recovery in consumer confidence.
See More
