Nvidia is gearing up to announce a suite of new gaming products at the highly anticipated CES tech show, with investors keenly awaiting updates on the trajectory of the company's generative artificial intelligence sales, according to insights from Wedbush Securities. The brokerage emphasizes that the critical questions surrounding Nvidia include the anticipated sales performance of Blackwell, a generative AI system, over the forthcoming quarters.
There are rising concerns regarding the timeline for original design manufacturers, which could potentially delay achieving full production capacity. However, Wedbush is skeptical that Nvidia will address these revenue timing concerns, as they primarily impact the immediate financial outlook rather than long-term viability. A significant focus for investors will be the rollout of AI-based consumer applications, which are poised to enhance Nvidia's offerings and could stimulate upgrade cycles across hardware, impacting the broader technology landscape significantly. One of Nvidia's most anticipated announcements at CES, set to kick off on January 7, is expected to pertain to its highly regarded 50xx series graphics processing units.
Wedbush posits that this announcement could have substantial implications for other players in the gaming hardware arena, particularly if it inspires a refresh cycle for gaming PCs. In addition to new GPUs, Nvidia is also likely to shed light on its Jetson Thor robotics program and provide updates on its autonomous driving products.
While recognizing the compelling nature of these advancements—projecting that markets could eventually grow large enough to affect Nvidia's revenue appreciably—Wedbush analysts, including Matt Bryson, caution that substantial time will be required for these developments to manifest effectively. Furthermore, Wedbush anticipates that Advanced Micro Devices will use CES as a platform to unveil several innovative client compute products.
The brokerage notes that AMD has gained significant market share in the client computing segment. This positive trend is projected to continue throughout the year, especially if GPUs stimulate a refresh of gaming PCs. AMD stands to benefit from incremental revenue via a rejuvenation of its GPU lineup and the introduction of its new FidelityFX Super Resolution technology.
Nevertheless, Wedbush maintains that Nvidia is likely to sustain its dominance in the GPU market in the near term. There is also speculation around Intel and its presence at CES. Wedbush suggests that any substantial announcements from Intel may be limited due to the company’s ongoing leadership transition.
Pat Gelsinger, who recently retired as chief executive, leaves the interim leadership in the hands of Chief Financial Officer David Zinsner and the newly appointed head of Intel Products, Michelle Johnston Holthaus, who are both acting as co-CEOs until a permanent replacement is appointed..