Nvidia May Benefit from Data Indicating Stronger-Than-Expected Demand for Taiwan Exports

Nvidia shares could potentially gain momentum as Taiwan’s export data indicates stronger-than-expected demand for the chipmaker’s data center products, despite a significant drop in September, according to analysts at UBS.

The Taiwan Ministry of Finance recently disclosed that September exports of Automatic Data Processing equipment, excluding laptops, reached $6.1 billion. This figure represents a 25% decline from August’s $8.2 billion, marking the lowest monthly performance in UBS’s 10-year dataset. This downturn follows an underwhelming August, yet analysts believe that the overall trend suggests potential growth for Nvidia, spurred by expectations of a more typical seasonal month in October.

“Assuming a normal seasonal month of October, this implies approximately $22.5 billion of exports for the same three-month period as Nvidia’s fiscal third quarter (October)—up 21% quarter-over-quarter and broadly aligned to slightly exceeding our +15% model for Nvidia’s data center revenue,” UBS stated.

However, the analysts urged caution regarding the reliance on the correlation between Taiwan’s export figures and Nvidia’s reported revenue, noting that discrepancies between the two can be substantial.

“We would warn that the quarter-over-quarter growth for Taiwan and Nvidia has varied by as much as the mid-teens in either direction in recent years, so the data is not definitive,” they added.

This analysis from UBS comes just ahead of Taiwan Semiconductor Manufacturing’s upcoming September sales report, which is expected to provide further insights for Nvidia.