Summary
- The export restriction imposed on Nvidia by U.S. authorities for exporting its A100 and H100 GPUs chips to China conversely creates certainty for Microsoft and the other U.S. hyperscalers.
- The reason is the deterioration of competitive positioning by Chinese tech giants unable to power their global AI clouds with advanced computing in the coming years.
- For Tencent, in particular, who wants to create an omnichannel experience for gamers in its staircase to the metaverse, things are likely to get more painful.
- On the other hand, after acquiring Activision, the U.S. software giant's positioning in the metaverse should be considerably improved as its AI cloud gets a boost with H100 chips.
- It implies Microsoft gaining market share, which should in turn improve valuations, namely through a $290 price target.
For further details see:
Microsoft: Competitive Positioning Just Got Better Amid All The Uncertainty