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Thursday, April 26, 2018

Samsung's Bullish Comment Today For NVIDIA And AMD

Samsung reported strong earnings today. What jumped out as a positive for AMD (NASDAQ:AMD) and NVDIA (NASDAQ:NVDA) is the implication that China datacenter demand appears to be accelerating.

Samsung said that the datacenter business has been strong in the US "but now [also] in China." That one small comment is important for AMD and NVIDIA.

AMD reported strong results last night due in part to the EPYC server product ramp. They are likely to benefit from a pick up in momentum in China. In August 2017 AMD said,

"Today we celebrate the AMD EPYC family of CPUs for the datacenter market in China and are excited to announce support for the leading cloud server providers, Tencent and JD.com, while continuing momentum from Baidu, Lenovo, and Sugon."

If Samsung is seeing more strength in datacenter, AMD should also benefit.

As for NVIDIA they also made similar announcements about supplying Chinese cloud providers.

Here's what NVIDIA said,

"Alibaba Cloud, Baidu and Tencent are upgrading their massive data centers, shifting from NVIDIA Pascal architecture-based systems to Volta-based platforms..."

Both AMD and NVIDIA are direct beneficiaries of the China cloud datacenter build out.

There should be no slowdown in the US as well.  Google (NASDAQ:GOOG) and Facebook (NASDAQ:FB) both reported strong capital expenditure numbers which should directly benefit AMD and NVIDIA.

We recently wrote that datacenter could be an upside surprise for NVIDIA when they report May 10th. We showed that the April quarter typically shows strong sequential growth in datacenter for NVIDIA.

With Samsung confirming a momentum pick up in China, this gives us even further confidence in AMD and NVIDIA.

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