Nvidia (NASDAQ:NVDA) has faced serious challenges with ramping up its integrated rack scale solutions using its GB200 technology. The company has grappled with overheating in high-density deployments, prompting multiple redesigns of its NVL72 server racks. On top of that, supply chain bottlenecks, particularly around liquid cooling systems and power delivery modules, have delayed production and complicated rollout plans.
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While there were high expectations for growth in 2025, Morgan Stanley analyst Joseph Moore thinks that some estimates for rack deployments, especially from Taiwan, were too optimistic. Despite breakthroughs in addressing supply issues, Moore notes that output from Taiwan has remained limited. He also highlights delays and uncertainty surrounding the Blackwell Ultra (B300/GB300) products, though no major disruptions have been reported.
Still, Moore points out that several industry insiders view the early-stage rack hurdles as “manageable.” He remains constructive but flags a significant disconnect between feedback from Taiwan and what’s being assumed in the U.S., driven in part by the patchy and opaque nature of the rack market.
And this is where Moore shares a bit of good news. Taiwan rack data appears to be improving, which should lift overall sentiment and suggests that volumes may better align with Moore’s expectations. In April, the three key ODMs (Hon Hai, Wistron, and Quanta) shipped around 1,500 GB200 racks, up from 1,000 in Q1. While other companies like HP, Lenovo, and Super Micro are also involved in rack production, Moore estimates that these three account for roughly 90% of the early output. The uptick in shipments indicates that previous low-end volume estimates may have been too pessimistic. If the current pace continues, Nvidia should be on track to hit 15,000 racks by year-end.
Through it all, Moore remains bullish. Nvidia is still one of his top semiconductor picks, with an Overweight (i.e., Buy) rating and a $160 price target, suggesting ~19% upside from here. (To watch Moore’s track record, click here)
That’s a fairly common take on Wall Street. NVDA boasts a Strong Buy consensus rating, backed by 34 Buy calls, 5 Holds, and just a single Sell. The average price target sits at $164.65, pointing to potential upside of 22% over the next year. (See NVDA stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.