NVIDIA Cuts AI GPU Delivery to 3-4 Months

In recent developments, NVIDIA has significantly reduced the delivery timeline for its AI GPUs, decreasing it from 8-11 months at the close of the previous year to a current range of 3-4 months.

This strategic move by NVIDIA to streamline the AI GPU delivery cycle suggests two plausible scenarios. Firstly, the company may be orchestrating innovative measures to enhance production capacity, aligning with anticipated future orders. Alternatively, NVIDIA may already possess ample production capabilities to efficiently manage the existing backlog of orders, with a potential combination of both factors contributing to this effect.

The escalating demand for high-performance GPUs, such as NVIDIA's H100 and A100 tailored for data centers, is notably pronounced with the burgeoning advancements and applications in artificial intelligence. Numerous enterprises are making substantial procurements, creating a supply-demand gap for NVIDIA's high-performance GPUs. Notably, in 2023, Yotta, a prominent data center and server operator in India, initiated a procurement of 16,000 units of H100 GPUs from NVIDIA, with an additional order for 16,000 GPUs slated to follow. Yotta's renewed GPU procurement extends until March 2024, encompassing H200 in addition to H100, with an estimated order value of approximately $500 million, aligning with the figures from the preceding year.

In response to the burgeoning demand for AI capabilities, driven by the AI model wave and sustained growth in large model applications across vertical sectors, UBS has revised the target price for NVIDIA to $850. As the demand intensifies, NVIDIA's high-performance GPUs have become indispensable for AI research, propelling the company's market valuation and contributing significantly to the financial success of Jensen Huang. In December of the preceding year, Jensen Huang secured the tenth position on Forbes' prestigious list of "Top 10 Billionaires with the Most Wealth Gained in 2023," boasting a current net worth of $43.6 billion, reflecting a substantial increase of $29.8 billion throughout 2023.

Establishing itself as the predominant force in AI chips, NVIDIA witnessed a remarkable surge of over 230% in its stock price throughout 2023, propelling its market capitalization to an impressive $1.2 trillion. This ascent positioned Jensen Huang among the top 20 wealthiest individuals in the United States. Heading into 2024, NVIDIA sustains its robust momentum, consistently achieving new historical highs in stock prices. On February 5th, the stock price reached an unprecedented $690 per share, translating to a total market capitalization of $1.71 trillion, approaching the valuations of industry giants such as Amazon and Google's parent company, Alphabet. Market analysts anticipate that, given this upward trajectory, NVIDIA is poised to emerge as the third-largest global technology powerhouse by market capitalization, trailing only Microsoft and Apple.