UBS: NVIDIA AI GPU delivery cycle has been significantly shortened, and future growth may be weak

According to the latest investor memo from UBS analysts, the delivery speed of NVIDIA AI GPU has been significantly improved. According to the memo, the original delivery time of 8-11 months has been shortened to 3-4 months, which shows NVIDIA's improvement in processing orders.

UBS conducted an in-depth analysis of this situation and pointed out that this brings opportunities but also challenges. The shortened delivery cycle reflects the effectiveness of NVIDIA and TSMC in increasing production capacity, especially the successful resolution of the bottleneck problem of CoWoS packaging, which will bring more revenue to NVIDIA. As the backlog of orders is gradually cleared, NVIDIA needs to actively seek new sources of orders to avoid a decline in revenue.

The memorandum states that the U.S. government’s export control policy to China has restricted the supply of NVIDIA’s AI GPUs in the Chinese market, causing other orders to gain production capacity space. Despite this, UBS expressed concerns about the short-term growth prospects of NVIDIA AI GPU, believing that the shortened delivery cycle may mean that its short-term growth is approaching its peak, and future growth momentum may be insufficient.

Despite the challenges, UBS remains optimistic about NVIDIA and raised its stock price target to $850. NVIDIA’s current stock price is about $725. This shows UBS's confidence in NVIDIA's long-term competitiveness in the field of artificial intelligence GPUs.

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