Morgan Stanley forecasts that the demand for cooling systems required for Nvidia’s GPU server racks in data centers will generate a $4.8 billion market by 2027. In its July 30 report, the bank highlights that liquid cooling systems are essential for alleviating power shortage pressures in data centers. These systems, according to Morgan Stanley, can enhance thermal design power and reduce capital expenditure by 10% to 15%. A liquid cooling system for Nvidia’s GB200 GPU server rack costs around $82,460, which is 15 to 20 times more expensive than an air-cooling system for its H100 GPU rack. Nvidia’s GPUs, which dominate the market, are integral to generative AI tools.
Morgan Stanley analysts emphasize that expertise in heat flow management, precision, and timely market delivery are crucial factors for success in this arena. Companies set to benefit include vendors with proven shipment records, such as Vertiv, Schneider Electric, Taiwan’s AVC, and Delta Electronics. Delta Electronics is Morgan Stanley’s top pick, owing to its integrated power and cooling solutions designed for data centers, which the bank believes will contribute an additional $280 million in AI cooling revenue by 2025. The bank has raised its price target for Delta from NT$400 to NT$488, representing a potential upside of about 26%.
Additionally, Morgan Stanley is optimistic about AVC, noting its strong position in offering various air and liquid cooling products for AI servers. AVC has been identified as a key partner for Nvidia’s GB200 cold plate, a crucial component in liquid cooling technology. The bank anticipates AVC will launch its first batch of shipments in Q3 2023 and capture 30% of the supply share by 2025. Consequently, Morgan Stanley has increased its price target for AVC from NT$520 to NT$830, suggesting a potential upside of around 35%.
— CNBC’s Michael Bloom contributed to this report.
Original Story https://www.cnbc.com/2024/08/01/morgan-stanley-nvidia-gpu-cooling-needs-a-4point8-billion-opportunity.html
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