Goldman Sachs analysts reiterated their buy ratings on NVIDIA (NVDA) and Taiwan Semi (TSM) in a note Monday following recent rumors that OpenAI CEO Sam Altman is trying to raise up to $7 trillion to facilitate emerging AI demand.
The investment bank said while they do not take a view on the article or the proposed investment, they believe prioritizing investment for CoWoS (chip on wafer on substrate) capacity expansion is the most crucial and efficient solution to the current AI chip production limitations in the near term.
For TSM, which is on Goldman Sachs' APAC Conviction List, the firm said they view the company as the key direct beneficiary within its Taiwan semis coverage to upside from AI demand "given its leading position in terms of AI chip production market share thanks to its edge nodes capability and advanced packaging technology in CoWoS."
"We believe the company is dominating in high-end AI chips production, which are mainly produced using TSMC's N5/N7 process, including Nvidia (NASDAQ:NVDA)'s H100, and AMD's MI250," analysts wrote.
Meanwhile, given Nvidia's dominant competitive position in accelerated computing, Goldman Sachs views it "as the key enabler of Generative AI development across the large cloud service providers, enterprises spanning a wide range of industry verticals, and sovereign states."
"Not only is Nvidia well-positioned to address and support the training of large complex models, but it also has a strong and growing foothold in the inference market with ~40% of FY2024 Data Center segment revenue derived from inference workloads, per Nvidia's estimate," said the firm. Nvidia is on Goldman Sachs Americas Conviction List.