In the recent U.S. stock market session, NVIDIA shares enjoyed a significant surge, closing more than 7% higher and gaining an additional 1.8% after-hours, settling at $445.57 per share.
Behind NVIDIA's spike lie two key factors: a nod from Morgan Stanley and a bidding war for NVIDIA GPUs by Middle Eastern elites.
Morgan Stanley: NVIDIA Still Tops, Sees Major Upside Ahead
On Monday, analysts at Morgan Stanley released a report reiterating NVIDIA as the firm's top pick from its Q2 earnings releases and offered a bullish outlook.
Despite a 10% decline in NVIDIA's share price this month, attributed to supply constraints and persistent economic concerns, Morgan Stanley analysts foresee long-term benefits for the tech giant. The report suggested that the recent sell-off presented an excellent buying opportunity. Even with supply chain constraints, the analysts predicted significant growth for the current quarter and even stronger prospects over the next three to four quarters.
With major investments shifting toward artificial intelligence, NVIDIA remains Morgan Stanley's go-to choice. The company's exceptional supply-demand imbalance is expected to persist in the coming quarters.
Having attained a valuation surpassing $1 trillion, NVIDIA shares have seen an explosive growth, soaring more than 200% this year alone, outpacing most tech stocks. The company is scheduled to announce its Q2 earnings on August 23.
Middle East Tycoons in Heated Race for NVIDIA GPUs
The Financial Times reported on Tuesday that Saudi Arabia and the United Arab Emirates (UAE) are in fierce competition to acquire thousands of high-performance NVIDIA graphics cards, joining the global AI arms race.
Insiders revealed that Saudi Arabia has secured at least 3,000 of NVIDIA's H100 graphics cards, priced at $40,000 each, through King Abdullah University of Science and Technology (Kaust). Simultaneously, the UAE has locked in thousands of NVIDIA graphics cards and developed its own open-source large language model, Falcon, at the state-owned tech innovation institute in Masdar City, Abu Dhabi.
Close sources to NVIDIA and its manufacturer, TSMC, stated that NVIDIA is slated to ship around 550,000 H100 graphics cards globally in 2023, mainly to U.S. tech firms.
By the end of 2023, Kaust is expected to receive 3,000 of these specialized graphics cards, amounting to approximately $120 million. The university also possesses at least 200 NVIDIA A100 graphics cards and is currently constructing a supercomputer, ShaheenIII, anticipated to go live this year. This machine will operate 700 NVIDIA super graphics cards, the GraceHoppers.
Multiple insiders closely associated with the university disclosed that Kaust intends to use these graphics cards to develop its own large language model, akin to OpenAI's GPT-4.
In a related development, the UAE became the first country to establish a Ministry of Artificial Intelligence in 2017, launching the "Generative AI Guidelines" to reinforce its pioneering status in the tech and AI realm globally.
The Falcon model is now available online for free, having undergone two months of training earlier this year on 384 A100 graphics cards.
