蜜豆视频

Video:Year Ahead 2025: Roaring 20s: The next stage- with Global CIO Mark Haefele(4:23)

Podcast: The Year Ahead opportunity set - with CIO's Kiran Ganesh, Jon Gordon, and Wayne Gordon (16:16)

NVIDIA shares closed 0.5% higher on Thursday, recovering from an intraday loss of 3.5% as investors parsed the chipmaker鈥檚 results for the quarter ended in October. Its quarterly revenue and earnings per share both beat consensus estimates鈥攂y 6% and USD 0.06, respectively鈥攚hile the fourth-quarter revenue guidance came in only slightly above average analyst estimates. The Nasdaq closed flat on Thursday.

The rather muted market reaction to the results of the world鈥檚 largest company by market capitalization came after the broader tech sector has had two years of solid returns driven by the growth story of artificial intelligence (AI). With the Nasdaq near record highs, we believe volatility in the sector is likely to increase as near-term risks loom, including US export controls, US tariff policy under President-elect Donald Trump鈥檚 second term, and the transition to a new generation of AI chips toward the end of 2025.

But we maintain our confidence and positive outlook on the technology, and expect earnings for our preferred AI companies to increase 25% in 2025 compared with the broader tech sector鈥檚 18% growth.

NVIDIA鈥檚 forward guidance points to strong demand for AI chips. While the chipmaker's revenue guidance for the January 2025 quarter may have disappointed the loftiest of expectations ahead of the results, CEO Jensen Huang continued to highlight strong demand from its customers. This is consistent with the strong spending commitments from Microsoft, Alphabet, Amazon, and Meta in recent quarters. We now expect the combined capex of these big tech companies to grow 50% to USD 222bn in 2024, and another 20% to USD 267bn in 2025. Assuming peak capex intensity (capex divided by sales) for each company, the combined capex could potentially reach USD 280bn. Their willingness to invest will likely continue to support strong growth in AI semis, especially in the segments of GPUs, custom chips, and high-bandwidth memory chips.

AI adoption and monetization trends are promising. Cloud revenue growth across big tech accelerated for the fourth straight quarter during the July-September period, and margins remained strong. With big tech鈥檚 management teams highlighting increasing AI adoption and the business value the technology has brought, we continue to believe that we鈥檙e still in the early stages of a major investment boom and technological advances that may fundamentally affect all economic sectors. We estimate that AI value creation could amount to USD 1.16tr by 2027.

Trump鈥檚 tariffs should have limited impact on AI鈥檚 growth story. We expect new US tariff policies to be unveiled in the first 100 days of Trump鈥檚 second term and likely take effect in the second half of 2025. Should the effective US tariff rate on Chinese imports be raised substantially and some universal tariffs be introduced on tech imports, the sector is not immune. Tariff and export control-related uncertainty could drive volatility鈥攊n 2018, tech stocks saw a roughly 25% correction from peak to trough amid trade worries. However, we think several tech segments may get tariff reliefs or exemptions, and the AI supply chain has the lowest dependency on China at around just 5%. Most of the chip manufacturing and final assembly is done globally, including some domestically in the US.

So, with solid fundamentals and a relatively manageable impact on the AI supply chain from potential tariffs, we believe the risk-reward remains favorable for the investment theme.

For more details, please see "Intelligence Weekly #10: What do NVIDIA's AI outlook and tariffs mean for tech in 2025?" (published 21 November 2024).