According to Japan’s Nomura Securities, one type of technology is becoming essential to support the requirements of artificial intelligence servers from NVIDIA and other technology giants: liquid cooling, a cooling technique used in data centers that helps improve power and cost efficiency. According to Nomura Securities, the cooling method used so far has been air cooling, but companies are starting to explore other options. “As we approach the limits of the cooling capacity of air cooling, the importance of liquid cooling is becoming more and more evident…Liquid cooling is becoming a must-have for the GB200,” the bank said. The GB200 is NVIDIA’s next-generation AI graphics processor, due to ship later this year. Nomura Securities predicts that the penetration rate of liquid cooling in NVIDIA’s AI servers will rise from 8% in 2024 to 43% in 2025 and 47% in 2026. Technology companies are capitalizing on the AI boom to drive the development of products and services in the field. This also means that AI data centers are growing rapidly, and so is their demand. Data centers house vast amounts of computing power required for AI workloads. Morgan Stanley said in an earlier report that liquid cooling systems are a solution to data centers’ “power shortage pressures.” The firm said such systems could save 10% to 15% on capital expenditures. Against this backdrop, Jefferies is bullish on four Asian stocks that it says will be the “major beneficiaries” of the liquid cooling trend. AVC: Jefferies said AVC should capture at least 50% market share in cold plate orders for Nvidia’s G200 from major cloud service providers. Cold plates are the components that move heat away from devices and dissipate it into a separate cooling system. The firm has a target price of NT$743 ($23.20) on the stock, suggesting an upside of about 30%. Auras: Auras supplies cold plates to Super Micro Computer, another big beneficiary of the AI boom. Jefferies noted that the Taiwan-based company is also an “enabler” of CDUs (coolant distribution units) provided by electronics company Quanta for tech giant Meta. The firm has a price target of NT$797 on the stock, suggesting upside of about 25%. Delta: Taiwanese company Delta is likely to grab market share in liquid cooling content for tech giants such as Microsoft, Meta and Amazon Web Services, Jefferies said. The firm has a price target of NT$490 on the stock, suggesting upside of about 25%. Nidec: Japanese company Nidec is a major supplier of coolant distribution units for supermicrocomputers, and Jefferies said the company is “aggressively” pursuing the business. The firm has a price target of JPY9,000 ($62.6) on the stock, suggesting upside of about 53%. — CNBC’s Michael Bloom contributed to this report.
Nomura unveils Asian stocks to support Nvidia’s server needs
By NvidiaDaily
