CJ Muse, a semiconductor analyst at Cantor Fitzgerald, recently appeared on CNBC’s ‘Squawk on the Street’ to discuss the latest developments in the tech sector, particularly focusing on Qualcomm (QCOM) and Nvidia (NVDA). Muse maintains a ‘buy’ rating on Nvidia with a $200 price target but holds a more cautious stance on Qualcomm, reflecting his ‘hold’ rating.
Regarding Qualcomm, Muse commented on the company’s legal successes, noting that their recent victories in court, including against major players like Apple (AAPL), reinforce their position and legal track record. However, he acknowledged that Qualcomm’s heavy reliance on the smartphone market presents ongoing challenges, with their diversification strategy requiring time to mature. Despite these challenges, the latest news on Qualcomm’s royalty stream is seen as a marginal positive.
The discussion then pivoted to Nvidia, where Muse addressed whether the company continues to dominate the semiconductor landscape. He highlighted Broadcom CEO Hock Tan’s recent comments on custom silicon, suggesting that while Nvidia leads the market, there’s growing space for companies like Broadcom (AVGO) and Marvell (MRVL) that support tech giants like Google (GOOG), Meta (META), TikTok, Amazon (AMZN), and Microsoft (MSFT) with custom silicon solutions.
Muse emphasized Nvidia’s current product cycle as potentially the best in its history, especially with the upcoming Blackwell GPU, positioning Nvidia as likely to be the top performer among semiconductor companies in 2025. When questioned about the duration of Nvidia’s growth cycle, Muse compared it to past tech investment cycles but stressed the uniqueness of this AI-driven cycle. He noted that the hyperscalers, despite massive expenditures on AI infrastructure, are still generating significant free cash flow, indicating an existential need to advance towards Artificial General Intelligence (AGI).
He further explained that the continuous evolution of AI models, like OpenAI’s recent release, underscores an increasing demand for computational power, suggesting that this cycle of investment in AI could extend well beyond typical expectations. Muse believes that even if there were to be a pause in Nvidia’s growth trajectory, it would not be until 2027, providing a clear path for sustained growth for Nvidia and other key players in the AI accelerator market, including companies like TSMC, ARM, and various equipment and test providers.
In sum, Muse’s analysis paints a picture of a tech landscape where Nvidia holds a commanding lead in AI and computing innovation, but there’s also room for growth and specialization among other players, driven by the relentless push towards more advanced AI capabilities.
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