KeyBanc: Rubin's delay has limited impact and does not change the overall positive outlook on NVIDIA
KeyBanc analyst John Vinh maintains an "Overweight" rating on NVIDIA with a target price of $275. Although the mass production progress of the new generation Rubin GPU has been slightly delayed due to memory technology bottlenecks, with expectations revised down from 2 million to 1.5 million units, NVIDIA's capacity assurance in AI chips remains solid, and overall supply can still meet market demand. It is expected that CoWoS capacity will reach 650,000 wafers by 2026, demonstrating its long-term layout advantages. In the short term, the pace of high-end AI hardware deployment may slow down, but the impact is "relatively limited."
Against the backdrop of sustained strong demand for artificial intelligence chips, NVIDIA's (NVDA.US) key capacity assurance remains solid, but the pace of advancement for the new generation of GPU products may be affected by bottlenecks in memory technology.
According to a report released by KeyBanc Capital Markets after researching the Asian supply chain, NVIDIA's supply in advanced packaging technology CoWoS (Chip-on-Wafer-on-Substrate) has been largely secured. It is expected that CoWoS capacity will reach 650,000 units in 2026 (a year-on-year increase of 76%), and further increase to 840,000 units in 2027 (a year-on-year increase of 29%), indicating its long-term layout in AI chip capacity still has advantages.
From the product structure perspective, the firm estimates that the CoWoS capacity in 2026 can support approximately 5.5 to 6 million Blackwell GPUs, 1.5 million Rubin GPUs, and 1 million Hopper GPUs, with overall supply still able to meet the high demand for AI computing power in the market.
However, analyst John Vinh pointed out that the mass production progress of NVIDIA's new generation Rubin GPU may be slightly delayed, mainly constrained by the verification progress of the next generation of high-bandwidth memory (HBM4). As HBM4 is still in the critical certification stage, the production target for Rubin GPUs has been revised down from the previously expected 2 million units to 1.5 million units.
As a result, KeyBanc has also lowered its shipment expectations for NVIDIA's AI server systems (Vera Rubin racks) from the previous 12,000 to 14,000 units down to about 6,000 units, reflecting that the pace of high-end AI hardware deployment may slow in the short term.
Nevertheless, Vinh believes the related impact is "relatively limited" and has not changed the overall positive outlook on NVIDIA, maintaining an "overweight" rating and setting a target price of $275
