To The Moon

With the support at $120, moving in the range of $120-$127, we see this recent dip from overbought too fast situation as a good buying opportunity.

There are some speculations around SMCI being one of NVDA's biggest clients. However we find it not to be true, it in latest and past FS clearly defines what is the definition of direct customers:

We refer to customers who purchase products directly from NVIDIA as direct customers, such as add-in board manufacturers, distributors, original device manufacturers, or ODMs, original equipment manufacturers, or OEMs, and system integrators. We have certain customers that may purchase products directly from NVIDIA and may use either internal resources or third-party system integrators to complete their build. We also have indirect customers, who purchase products through our direct customers; indirect customers include cloud service providers, consumer internet companies, enterprises, and public sector entities.

Nvidia did not specifically mention who are their 5 customers because we think channels will be a better definition than 'customers'. Based on the definition, there are 2 types of direct customers: distributors/integrators, and those who buy direct and use 3rd party to complete their build.

Whoever that facilitates the building of the full system does not affect the demand of the chips, and type 2 clients could either change their 3rd party, or work with another distributor. Even if SMCI is going to get delisted tomorrow, we don't see it affecting NVDA's sales as SMCI needs NVDA more than NVDA needs it. Cloud providers clients will just change a distributor or their 3rd party, it doesn't affect NVDA's appeal. We believe the market has overreacted. Dell is a good alternative for SMCI.