SK Group Chairman Warns of Bottlenecks Due to Rapid Growth of AI Data Centers, According to Report
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Oct 28 2025
0mins
Should l Buy NVDA?
Source: SeekingAlpha
AI Data Center Growth: SK Group Chairman Chey Tae-won highlighted that the rapid expansion of AI data centers is causing supply bottlenecks for chips and other essential components.
Global Competition in AI: Chey emphasized the intense global competition in AI, noting that major economies like the U.S. and China have implemented national strategies to gain an advantage.
Event Context: Chey made these remarks during a business event at the APEC summit in South Korea, attended by global business leaders, including U.S. President Donald Trump and Chinese President Xi Jinping.
SK Hynix's Role: SK hynix, a subsidiary of SK Group, is a significant supplier of High-Bandwidth Memory chips to Nvidia, which is positioned to benefit from the growing AI market.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for NVDA is 264.97 USD with a low forecast of 200.00 USD and a high forecast of 352.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 190.050
Low
200.00
Averages
264.97
High
352.00
Current: 190.050
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is a full-stack computing infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. The Company’s segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing platforms and artificial intelligence (AI) solutions and software; networking; automotive platforms and autonomous and electric vehicle solutions; Jetson for robotics and other embedded platforms, and DGX Cloud computing services. The Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems, and Omniverse Enterprise software for building and operating industrial AI and digital twin applications.
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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See More
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- Opportunities for Nvidia and Broadcom: As major computing unit suppliers, Nvidia and Broadcom are expected to benefit from this massive spending, with analysts projecting a 52% revenue growth for both companies this fiscal year, highlighting that the AI boom is far from over.
- Market Reaction Misalignment: Despite the decline in Nvidia and Broadcom's stock prices due to market sentiment, investors should seize the current undervalued buying opportunity, especially as Nvidia's P/E ratio stands at 24 times, significantly lower than Broadcom's 32 times.
- Technological Collaboration Driving Growth: The soaring demand for Broadcom's TPU chips, developed in collaboration with Alphabet, is expected to further boost Broadcom's sales, reflecting the increasing need for custom chips among AI hyperscalers.
See More
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- Market Value Surge: Micron Technology's market capitalization has reached $46.2 billion, with a 317% increase in share price over the past 12 months, indicating strong growth driven by AI demand and suggesting potential for substantial profits in the future.
- Surge in AI Hardware Demand: As major tech companies are projected to spend over $700 billion in 2026, the demand for Micron's high-bandwidth memory chips is skyrocketing, enhancing the company's competitiveness in the AI data center market and potentially narrowing the gap with Nvidia.
- Production Capacity Expansion: Micron plans to invest $200 billion to expand dynamic random access memory (DRAM) capacity to address the memory chip shortage expected to last until 2027, aiming to leverage high short-term demand to increase market share.
- Attractive Valuation: With a forward price-to-earnings (P/E) ratio of 12.5, Micron's shares trade at nearly half of Nvidia's forward P/E of 24, reflecting market uncertainty about memory hardware margins and leaving ample room for continued growth, making the stock a buy opportunity.
See More
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- Surge in AI Chip Sales: In fiscal 2025, Broadcom's AI chip revenue surged 65% to $20 billion, accounting for 31% of total revenue, effectively offsetting slower growth in non-AI chip and infrastructure software businesses, indicating its competitiveness in the customized AI accelerator market.
- Optimistic Future Outlook: Broadcom aims to achieve annualized AI chip revenues of $60 billion to $90 billion by fiscal 2027, primarily from three hyperscale customers, reflecting strong demand from cloud giants for Broadcom's custom AI accelerators and further solidifying its market position.
- Ongoing Acquisition Strategy: Broadcom plans to continue acquiring more companies to bolster its AI chipmaking and infrastructure software businesses, with analysts projecting revenue and adjusted EBITDA growth at CAGRs of 38% and 36% from fiscal 2025 to 2028, highlighting its long-term expansion potential in mobile, automotive, and industrial sectors.
See More
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- Outstanding Market Performance: Nvidia achieved an astonishing 1,180% growth over the past five years, significantly outperforming the S&P 500's 91% return, turning a $1,000 investment in February 2021 into $12,810, showcasing its strong leadership in the AI sector.
- Revenue Surge: For the fiscal third quarter of 2026, Nvidia's revenue rose 62% year-over-year and skyrocketed 1,113% compared to the same period in fiscal 2021, indicating robust business momentum amid soaring demand for AI chips, with a market cap reaching $4.6 trillion.
- Investor Confidence: Despite concerns about an AI bubble, Nvidia's forward price-to-earnings ratio of 24.7 suggests that its stock remains attractive, reflecting investor optimism about its future growth potential and solidifying market confidence in its sustained performance.
- Strong Industry Demand: As the economy enters an AI-driven spending spree, Nvidia stands as a primary beneficiary of this infrastructure build-out, further solidifying its market leadership position and capitalizing on the burgeoning demand for AI technologies.
See More
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- U.S. Market Struggles: The S&P 500 has had a shaky start this year, yet it remains up 75% over the past five years, with a current P/E ratio of 30, indicating a historically high valuation that may deter new investors.
- Tech Stocks Dominate: The recent rally has been primarily driven by a handful of mega-cap tech stocks, such as Nvidia, Microsoft, and Apple, leading to concerns about market overheating due to the lack of broader stock participation.
- International ETF Opportunity: The Vanguard Total International Stock ETF (VXUS) emerges as an ideal investment choice, featuring a low expense ratio of 0.05% and holding 8,646 stocks, providing extensive exposure to overseas markets, particularly in emerging markets and Europe.
- VXUS Strong Performance: VXUS has rallied 9% year-to-date while the S&P 500 has remained flat, indicating a shift among investors towards diversifying their portfolios away from the overheated U.S. market, which could further propel VXUS's growth.
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