Bank of America: NVIDIA NVLink Fusion technology is "the most strategically significant" and reiterates buy rating
Bank of America reiterated its "Buy" rating on NVIDIA with a target price of $160, stating that its NVLink Fusion technology is "the most strategically significant." This technology allows data centers to mix NVIDIA GPUs with third-party CPUs or AI accelerators, breaking down hardware ecosystem barriers and expanding the market. Analyst Vivek Arya pointed out that NVLink Fusion opens NVIDIA's interconnected architecture to cloud service providers, significantly expanding its total addressable market. NVIDIA has also launched multiple AI products to support the development of various industries
According to the Zhitong Finance APP, NVIDIA (NVDA.US) CEO Jensen Huang announced several technological advancements, among which the release of the NVLink Fusion system is regarded by Bank of America as the "most strategically significant" move. This technology allows data centers to mix NVIDIA GPUs with third-party CPUs or customized AI accelerators, marking NVIDIA's official break from hardware ecosystem barriers and launching an assault on a broader market. The bank reiterated its "Buy" rating on NVIDIA stock with a target price of $160.
Analyst Vivek Arya noted in his research report that the core value of NVLink Fusion lies in opening NVIDIA's self-developed NVLink high-speed interconnect protocol and Spectrum switches to cloud service providers. This means that cloud vendors can directly invoke NVIDIA's interconnect architecture in systems equipped with third-party chips (Marvell Technology (MRVL.US), Alchip, Astera Labs (ALAB.US), Synopsys (SNPS.US), Cadence Design Systems (CDNS.US) — notably excluding Broadcom (AVGO.US)) or deeply integrate its GPUs with ARM architecture CPUs from Qualcomm (QCOM.US), Fujitsu, and others.
"This move essentially expands NVIDIA's total addressable market (TAM) to the entire data center hardware ecosystem," Arya emphasized.
In addition to NVLink Fusion, NVIDIA also announced several important updates, including an expanded product portfolio and the launch of a "broad" range of AI products across multiple industries such as cloud computing, enterprise, gaming, and robotics. Arya added that all these products are crucial for the "trillions of dollars AI factory" industry.
Arya also mentioned that the rack-mounted GB200 NVL 72 Blackwell Systems have fully entered production, and the RTX Pro enterprise servers are helping companies achieve AI applications, intensifying competition with x86 architecture.
Finally, Arya explained that, as evidenced by recent agreements in the Middle East, the construction of sovereign AI is expected to bring long-term benefits
