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NVIDIA (NVDA) & YTL Reportedly in Talks on Data Center Deal
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NVIDIA Corporation (NVDA - Free Report) and Malaysia’s power-to-property conglomerate, YTL, are in advanced talks on a data center deal, Reuters reported, citing three sources familiar with the matter. The potential tie-up will further strengthen business relations between the two companies, from cloud gaming to data centers.
NVIDIA and YTL’s telecom division already agreed upon a cloud gaming partnership earlier this year. The rumored potential deal is likely to involve working together on cloud infrastructure, which will most probably be anchored at YTL’s data center complex in Johor, according to Reuters.
London-based news agency sources also revealed that the possible partnership will target businesses in Southeast Asia by giving them access to NVIDIA’s artificial intelligence (AI) hardware via cloud computing.
Therefore, the deal is likely to further boost NVIDIA’s Datacenter end-market business. The Datacenter end-market business is benefiting from the growing demand for generative AI and large language models using GPUs based on NVIDIA Hopper and Ampere architectures. The company’s third-quarter revenues from this business segment soared 279% year over year to $14.51 billion from $3.83 billion in the year-ago quarter.
NVIDIA dominates the market for AI chips. The meteoric rise of OpenAI’s ChatGPT has captivated the world’s attention on the power of generative AI to augment human capability, suggesting that the AI boom may just get started.
The adoption of ChatGPT among enterprises has already proven generative AI technology’s usefulness across multiple industries, including marketing, advertising, customer service, education, content creation, healthcare, automotive, energy & utilities and video game development. The growing demand to modernize the workflow across industries is expected to drive the demand for generative AI applications.
However, generative AI requires vast knowledge to create content and needs huge computational power. As a result, enterprises looking to create generative AI-based applications will be required to upgrade their existing network infrastructure.
NVIDIA’s next-generation chips with high computing power can be the top choice for enterprises. On the first-quarter fiscal 2024 earnings conference call, the company’s CEO, Jensen Huang, stated that existing data centers are insufficiently equipped to handle growing AI workloads.
NVIDIA’s GPUs are already being applied in AI models, which is expanding its footprint in untapped markets like automotive, healthcare and manufacturing. The generative AI revolution is likely to create huge demand for its next-generation high computing powerful chips. NVIDIA expects its fourth-quarter fiscal 2024 revenues to reach $20 billion from $6.05 billion in the year-ago quarter, largely driven by surging AI investments across the data center end market.
Zacks Rank & Other Stocks to Consider
Currently, NVIDIA sports a Zacks Rank #1 (Strong Buy). Shares of NVDA have surged 218.8% year to date (YTD).
The Zacks Consensus Estimate for Intel’s fourth-quarter 2023 earnings has moved a penny north to 44 cents per share in the past 30 days. The consensus estimate for 2023 earnings has increased 2 cents to 95 cents in the past 30 days.
Intel's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average surprise of 136.3%. Shares of INTC have surged 59.5% YTD.
The Zacks Consensus Estimate for Aspen's second-quarter fiscal 2024 earnings has moved north 10 cents to $1.49 per share in the past 30 days. The consensus estimate for fiscal 2024 earnings has increased 4 cents to $6.63 per share in the past 30 days.
Aspen's earnings missed the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average negative surprise of 32.3%. Shares of AZPN have dropped 4.9% YTD.
The Zacks Consensus Estimate for Datadog's fourth-quarter 2023 earnings has moved north 9 cents to 43 cents per share in the past 30 days. The consensus estimate for 2023 earnings has increased 21 cents to $1.53 per share in the past 30 days.
DDOG’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 28.6%. Datadog shares have rallied 56.4% YTD.
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NVIDIA (NVDA) & YTL Reportedly in Talks on Data Center Deal
NVIDIA Corporation (NVDA - Free Report) and Malaysia’s power-to-property conglomerate, YTL, are in advanced talks on a data center deal, Reuters reported, citing three sources familiar with the matter. The potential tie-up will further strengthen business relations between the two companies, from cloud gaming to data centers.
NVIDIA and YTL’s telecom division already agreed upon a cloud gaming partnership earlier this year. The rumored potential deal is likely to involve working together on cloud infrastructure, which will most probably be anchored at YTL’s data center complex in Johor, according to Reuters.
London-based news agency sources also revealed that the possible partnership will target businesses in Southeast Asia by giving them access to NVIDIA’s artificial intelligence (AI) hardware via cloud computing.
Therefore, the deal is likely to further boost NVIDIA’s Datacenter end-market business. The Datacenter end-market business is benefiting from the growing demand for generative AI and large language models using GPUs based on NVIDIA Hopper and Ampere architectures. The company’s third-quarter revenues from this business segment soared 279% year over year to $14.51 billion from $3.83 billion in the year-ago quarter.
NVIDIA Corporation Price and Consensus
NVIDIA Corporation price-consensus-chart | NVIDIA Corporation Quote
What’s Driving Demand for AI Chips?
NVIDIA dominates the market for AI chips. The meteoric rise of OpenAI’s ChatGPT has captivated the world’s attention on the power of generative AI to augment human capability, suggesting that the AI boom may just get started.
The adoption of ChatGPT among enterprises has already proven generative AI technology’s usefulness across multiple industries, including marketing, advertising, customer service, education, content creation, healthcare, automotive, energy & utilities and video game development. The growing demand to modernize the workflow across industries is expected to drive the demand for generative AI applications.
However, generative AI requires vast knowledge to create content and needs huge computational power. As a result, enterprises looking to create generative AI-based applications will be required to upgrade their existing network infrastructure.
NVIDIA’s next-generation chips with high computing power can be the top choice for enterprises. On the first-quarter fiscal 2024 earnings conference call, the company’s CEO, Jensen Huang, stated that existing data centers are insufficiently equipped to handle growing AI workloads.
NVIDIA’s GPUs are already being applied in AI models, which is expanding its footprint in untapped markets like automotive, healthcare and manufacturing. The generative AI revolution is likely to create huge demand for its next-generation high computing powerful chips. NVIDIA expects its fourth-quarter fiscal 2024 revenues to reach $20 billion from $6.05 billion in the year-ago quarter, largely driven by surging AI investments across the data center end market.
Zacks Rank & Other Stocks to Consider
Currently, NVIDIA sports a Zacks Rank #1 (Strong Buy). Shares of NVDA have surged 218.8% year to date (YTD).
Some other top-ranked stocks from the broader technology sector are Intel Corporation (INTC - Free Report) , Aspen Technology, Inc. (AZPN - Free Report) and Datadog, Inc. (DDOG - Free Report) . Intel sports a Zacks Rank #1 at present, while Aspen and Datadog each carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Intel’s fourth-quarter 2023 earnings has moved a penny north to 44 cents per share in the past 30 days. The consensus estimate for 2023 earnings has increased 2 cents to 95 cents in the past 30 days.
Intel's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average surprise of 136.3%. Shares of INTC have surged 59.5% YTD.
The Zacks Consensus Estimate for Aspen's second-quarter fiscal 2024 earnings has moved north 10 cents to $1.49 per share in the past 30 days. The consensus estimate for fiscal 2024 earnings has increased 4 cents to $6.63 per share in the past 30 days.
Aspen's earnings missed the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average negative surprise of 32.3%. Shares of AZPN have dropped 4.9% YTD.
The Zacks Consensus Estimate for Datadog's fourth-quarter 2023 earnings has moved north 9 cents to 43 cents per share in the past 30 days. The consensus estimate for 2023 earnings has increased 21 cents to $1.53 per share in the past 30 days.
DDOG’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 28.6%. Datadog shares have rallied 56.4% YTD.