Nvidia is the picks and shovels leader in the 'AI gold rush,' BofA says
Justin Sullivan
Nvidia (NASDAQ:NVDA) is slated to report first-quarter results on May 24 and Bank of America is looking for in-line results, but guidance may be stronger-than-expected as the company benefits from the artificial intelligence "gold rush." 
"We look for inline/modestly better [first-quarter] sales of $6.5B, but for FQ2 believe $200-$300M sales upside (vs. $7.1B consensus) could be possible on NVDA âs data center H100 product ramps levered to generative AI deployments," analyst Vivek Arya wrote in an investor note.
In addition, Arya noted Nvidia (NVDA) could see upside from richer content and pricing of its H100 chips - which is between two and three times more expensive than the A100 - and its ability to bundle more networking content.
A consensus of analysts estimate Nvidia (NVDA) will earn 91 cents per share on $6.52B in revenue in the first-quarter.
Arya noted the outlook for the second-quarter is about upside in the data center, with bullish expectations as high as $4.4B to $4.5B, up 15% sequentially.
"While a high bar, we note even stronger [quarter-over-quarter] growth 2 years ago when Ampere A100 started to launch (Jul/Octâ21 Q data center sales grew 16%/24% [quarter-over-quarter])," Arya explained, adding that gaming could be a "wildcard" for the coming period, given sluggish consumer demand. 
As it pertains to AI accelerators, Arya said the total addressable market in 2027 could be worth between $50B and $60B. Though competition is rising, with the likes of Google (GOOG) (GOOGL) TPU, Amazon (AMZN) Trainium and Inferentia, programmable chips from Intel (INTC) and AMD (AMD) and other GPUs, like AMD's (AMD) MI300, Nvidia (NVDA) is still well positioned. 
"We remind investors that success in AI requires full-stack computing and scale/experience across silicon, software, application libraries, developers plus enterprise and public cloud incumbency," Arya wrote. "In other words, itâs a 10+ yr well-honed turnkey model versus piecemeal silicon-only solutions from many competitors, which is what we believe can enable NVDA to maintain and possibly expand its AI market share." 
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