Morgan
Stanley
named
a
new
top
pick
which
it
called
a
“unique
Nvidia
proxy.”
That’s
Aspeed
Technology,
a
Taiwan-listed
fabless
chip
designer
which
Morgan
Stanley
pointed
out
is
the
Nvidia’s
only
supplier
of
baseboard
management
controller
processors,
which
are
a
key
component
of
the
tech
giant’s
artificial
intelligence
graphics
processing
unit,
GB200.
On
top
of
that,
the
bank
added,
Aspeed
is
unlikely
to
face
competition
in
the
near
term.
“We
see
Aspeed
as
a
unique
NVIDIA-related
play,
being
the
sole
BMC
supplier
for
GB200
and
a
key
supplier
to
help
realize
Omniverse
adoption,”
said
Morgan
Stanley
analysts
in
a
June
7
note.
Omniverse
is
a
3D
graphics
collaboration
platform
that
Nvidia
created.
“We
now
also
see
more
smart
city
and
smart
factory
customer
wins
for
Aspeed,
including
government
and
semiconductor
fab
projects.
Although
the
current
revenue
contribution
from
non-BMC
business
accounts
for
only
10%
of
total
revenue,
we
expect
this
to
aid
the
overall
gross
margin
trend,”
the
bank
added.
Morgan
Stanley
said
with
an
average
selling
price
of
$100
per
chip,
it
estimates
the
company
could
enjoy
gross
margins
of
90%.
The
positive
outlook
for
cloud
capital
expenditure
is
also
set
to
benefit
the
data
center
supply
chain,
according
to
Morgan
Stanley.
BMC
processors
are
used
in
data
center
equipment.
The
bank
estimates
that
cloud
capital
expenditure
growth
is
set
to
be
44%
year
on
year
in
2024,
following
earnings
reports
from
the
big
four
hyperscalers
—
Meta
,
Microsoft
,
Amazon
and
Google
.
Hyperscalers
are
large-scale
data
centers
that
offer
massive
computing
power
and
carry
out
much
of
the
cloud
computing
for
AI
applications.
That
expected
growth
would
be
a
42-point
acceleration
from
just
2%
year-on-year
growth
in
2023,
Morgan
Stanley
said.
The
bank
increased
its
price
target
for
Aspeed
to
5,150
Taiwanese
dollars
($159),
implying
upside
of
around
20%.
International
investors
who
want
to
buy
the
stock
can
go
through
their
international
broker
or
gain
exposure
to
the
stock
through
exchange-traded
funds.
The
stock
makes
up
2.2%
of
the
Global
X
Emerging
Markets
ex-China
ETF.
—
CNBC’s
Michael
Bloom
contributed
to
this
report.
