"Like Intel ten years ago!" Citi is optimistic about NVIDIA: will occupy 90% of the AI chip market share

Wall Street analysts believe that in the second quarter of this year, NVIDIA, which has risen by more than 50%, has significantly outperformed the market and other technology stocks. Its dominant position is likely to be further strengthened in the future.

Citigroup believes that NVIDIA's position in the AI chip field is similar to Intel's position in the PC chip field ten years ago. With the CUDA ecosystem and unparalleled GPU performance, NVIDIA is expected to occupy more than 90% of the market share in the AI chip field, while AMD can only take second place.

In a report on AMD released on Monday, Citigroup analyst Christopher Danely stated that evaluations conducted by third-party institutions on AMD's M1250 chip and NVIDIA's A100 chip showed that the hardware performance of AMD chips is about 80% of NVIDIA's.

In this report, Danely maintained a neutral rating on AMD with a target price of $120, and stated:

"We expect NVIDIA's H100 to have a similar advantage over AMD's MI300 (the latest generation AI chips from both companies). Considering the superior hardware performance and ecosystem, we believe that NVIDIA will maintain a significant advantage in market share compared to AMD."

This year's AI boom has made NVIDIA the most dazzling star among large US technology stocks. Its stock price has accumulated a 186% increase by 2023. Similarly, AMD, which has also benefited from the AI hype, has seen its stock price rise by 72%.

This year, both NVIDIA and AMD have launched new AI chips. NVIDIA released its new product in March, while AMD launched its new product earlier this month.

Citigroup analysts stated:

"We expect NVIDIA to occupy at least 90% of the AI chip market in the future. This situation is reminiscent of the competition between Intel and AMD ten years ago, when Intel had a market share of over 90% thanks to its superior performance and ecosystem."