2024-02-25 09:21:00
© Reuters. Guosheng Securities: Enlightenment of NVIDIA (NVDA.US) financial report on optical modules
Zhitong Finance APP learned that Guosheng Securities released a research report saying that this week NVIDIA (NVDA.US) handed over its “report card” for the last quarter, driving the rise of US AI stocks. The reason is that the core behind the rise in stock prices is performance. Industry leaders take away most of the profits, and this is true for every segment. “Poor perception” is more important than “poor expectation”. At this stage, the market is driven by fundamentals and superimposed on industry trends. Based on the industrial structure, status and development stage, we continue to be optimistic regarding leading companies in all aspects of optical communications.
At the same time, in response to some current questions in the market, the agency proposed NVIDIA’s inspiration for optical modules, explaining its continued optimism from three dimensions: the reconstruction of the valuation system of the AI industry chain, marginal changes in computing power demand, and comments on changes in optical modules. Reasons for AI and computing power industry chain.
The main views of Guosheng Securities are as follows:
On February 22, 2024, the much-anticipated NVIDIA released its FY2024Q4 financial report, achieving revenue of US$22.1 billion in a single quarter, a year-on-year increase of 265%, a month-on-month increase of 22%, and an expected US$20.41 billion. Net profit in a single quarter was US$12.29 billion, a year-on-year increase of 769% and a month-on-month increase of 33%. Revenue in the first quarter of fiscal 2025 is expected to be US$24 billion, compared with market expectations of US$21.9 billion. The company stated in the communication that generative AI is becoming a tipping point. After the earnings report, the company reversed the pre-earnings decline, and its stock price hit a record high before the market opened that night (with a market value of more than $2 trillion). AI-related stocks such as AMD, SMCI, AVGO, and Fabrinet, as well as the Nasdaq and Philadelphia Semiconductor Semi-Indices, all rose to varying degrees. The financial reports and market reaction have profound significance for the domestic optical communications/optical module sector.
At present, computing power infrastructure is already driving the development of AI, so the computing power industry chain can raise the valuation ceiling, and high PE is expected to be supplemented by a “blowout” EPS.It can be seen from the valuations of Nvidia and AMD that following the outbreak of AI, the market’s tolerance for their valuations is constantly increasing, and a sustained burst of performance is a necessary condition. At the same time, the increase in valuation reflects the market’s high recognition of the company’s prospects and the prospects of AI. Especially in 2024, overseas technology giants’ AI-related layouts continue to accelerate, and the release of openai sora allows everyone to see the big world. Model possibilities. As the most important shovel provider of AI, NVIDIA has become the “locomotive” of AI. “Buy more save more”. NVIDIA’s continuously iterative products continue to improve performance and reduce computing power costs, accelerating the arrival of the AGI era.
The demand for reasoning has just begun, and the cycle of “investment-profit, increased investment” may have just begun.NVIDIA stated at the results meeting that inference revenue in FY2024 has accounted for 40% of the data center business, or US$19 billion. In other words, various AI competitors have invested tens of billions of US dollars to maintain the operation of their own AI applications. In the future, we are not only expected to see large models with higher modal dimensions, such as Huang Renxun’s idea of ”letting large models add sound to videos,” but we are also expected to see advertisers like Meta using AI to continue to achieve high growth rates in their advertising business. , consumer Internet companies like Amazon use AI shopping assistants to further achieve GMV growth.
In the AI era, the importance of communication continues to increase, and optical modules are ushering in an era of development with favorable conditions.With the continuous development of AI, the importance of communication in training/inference is constantly increasing. The speed of product iteration has been significantly accelerated to complement the iteration of GPU computing. The value has also continued to increase, and industry leaders almost dominate the market. The market has a relatively complete understanding of the importance of optical communications in the AI era. From an industry perspective, optical modules have ushered in an era of development with favorable conditions. After the last round of cloud computing, domestic core optical module companies have gradually become global leaders. The domestic optical communication industry chain has obvious advantages in many links.
Computing power——
Optical communications: Zhongji InnoLight, Xinyi Sheng, Tianfu Communications, Taichenguang, Tengjing Technology, Guangku Technology, Guangxun Technology, Dekeli, Liant Technology, Huagong Technology, Yuanjie Technology, Cambridge Technology, Ming Technology Puguangmagnetics. Computing power tuning/scheduling/leasing: Hengwei Technology, Stech, Zhongke Financial, Oriental Materials, Borui Data, Zhongbei Communications, Zhongke Sugon, China Mobile, China Unicom, China Telecom.
Computing power equipment: ZTE, Tsinghua Unigroup, Ruijie Networks, Shengke Communications, Felinkex, Fii, Shanghai Electric Co., Ltd., Cambrian.
Liquid cooling: Invic, Shenling Environment, Gaolan Co., Ltd., Jialitu.
Edge computing power carrying platform: Meige Intelligence, Fibocom, and Quectel.
Satellite communications: China Satcom, China Satellite, Zhenyou Technology, Huali Chuangtong, Dianke Chip, Higer Communications.
Data elements –
Operators: China Telecom, China Mobile, China Unicom.
Data visualization: Vast Depth, Hengwei Technology, Sino-Singapore.
BOSS system: AsiaInfo Technology, Tianyuan Dike, Oriental Guoxin.
risk warning: AI development is less than expected, computing power demand is less than expected, and there are risks from market competition.
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