Nvidia Corporation (NASDAQ:NVDA) is gearing up for its highly anticipated annual GTC conference, set to kick off next week. With CEO Jensen Huang delivering the keynote on March 18, the event is expected to cover a range of important topics. Despite recent declines in stock price, Nvidia remains a focal point for investors, driven by the excitement surrounding artificial intelligence (AI) and its potential.
Key Topics at Nvidia’s GTC Conference
The upcoming GTC event is expected to touch on several key topics that investors and analysts are watching closely. Bank of America analyst Vivek Arya anticipates updates on Nvidia’s pipeline, including its Blackwell Ultra and Rubin architectures. Additionally, attention will be on Nvidia’s position in China and how the company compares to its competitors in the ever-evolving market for chips and AI technology.
Focus on Gross Margins and the Blackwell Transition
A critical issue for Nvidia in the near term is its gross margin recovery. After falling to 71% in its most recent quarter, investors are eager to know if margins can return to the mid-70% level. Arya notes that the Blackwell ramp, which led to higher costs and delays, has likely been the biggest contributor to Nvidia’s recent margin decline. “We believe the ongoing Blackwell transition and related complexity is likely the biggest incremental lift NVDA has had to make,” Arya explains. He believes that future transitions will likely be more manageable.
Nvidia’s Position in China and Potential Risks
Another major topic of discussion will be Nvidia’s exposure to the Chinese market. Arya highlights that Nvidia could be at risk of losing approximately $10 billion, or 5% of its sales, without any offsets. The potential impact of this will be closely examined, particularly as geopolitical tensions continue to affect global supply chains and markets.
Rising Competition and Custom Chip Alternatives
Competition in the chip market continues to heat up, especially with the rise of application-specific integrated circuits (ASICs). Companies like Broadcom Inc. (NASDAQ:AVGO) and, to a lesser extent, Marvell Technology Group (NASDAQ:MRVL), are gaining traction with custom chip solutions. The big question for Nvidia is whether its GPU platform can maintain its competitive edge as custom alternatives become more prevalent. Arya suggests that this is a critical area to watch in Nvidia’s strategy moving forward.
Co-Package Optics and Nvidia’s Switch/Networking Portfolio
Wells Fargo analyst Aaron Rakers is particularly focused on Nvidia’s developments in co-package optics (CPO) and Silicon Photonics (SiPho). Although it’s unlikely that Nvidia will showcase CPO at the GPU level during this year’s event, industry reports suggest that Nvidia may introduce CPO integration in its Quantum InfiniBand portfolio. Rakers notes that CPO and SiPho could become more significant in Nvidia’s switch and networking portfolio moving forward.
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