The Hot Chips 2018 Conference: Morgan Stanley's Takeaways

After attending the recent Hot Chips Conference 2018, a Morgan Stanley analyst said there are two clear winners in the semiconductor space from the trend of heterogeneous computing.

The Analyst

Morgan Stanley analyst Joseph Moore reiterated an Overweight rating and $273 price target for NVIDIA Corporation NVDA and an Overweight rating and $80 price target for Xilinx, Inc. XLNX.

The Thesis

Heterogeneous computing is huge opportunity for the market leaders, Moore said in a Friday note. (See the analyst's track record here.)

“We see a big role for non-CPU programmable products in a heterogeneous compute world — notably GPUs from NVIDIA and FPGAs from Xilinx as GPUs remain the dominant choice for machine learning training and inference workloads begin to transition from Intel CPUs (dominant platform for inference applications in the data center currently) to more differentiated processing architectures," the analyst said.

For Xilinx, Moore said process architecture is the key factor in boosting performance and efficiency. The company expects its upcoming 7nm-based adaptive compute acceleration platform to produce a 20x performance upgrade boost for machine learning inference with significantly lower latency.

For Nvidia, the autonomous vehicle market is one of the primary growth opportunities, the analyst said. The company’s DRIVE PX platform performs more than 320 trillion operations per second in support of Level 5 AVs.

Machine learning has increased the importance of machine vision, which should benefit Intel Corporation INTC subsidiary MobilEye as well, Moore said. As AI adoption in automobiles increases, he said Ambarella Inc AMBA could also benefit from the tailwind.

Price Action

Xilinx stock was higher by 0.79 percent and Nvidia by 1.82 percent at the time of publication Friday following the bullish commentary.

Related Links:

What Wall Street Thinks Of Nvidia's Q2 Earnings

Nvidia Gets Double Upgrade Ahead Of Earnings