Nvidia may benefit from data showing stronger-than-expected demand Taiwan exports

Investing.com -- Nvidia (NASDAQ:NVDA ) shares could see a boost as Taiwan's export data suggests stronger-than-expected demand for the chipmaker's data center products, despite a significant monthly decline in September, according to analysts at UBS.

The Taiwan Ministry of Finance recently reported that September exports of Automatic Data Processing (NASDAQ:ADP ), or ADP, equipment, excluding laptops, totaled $6.1 billion, down 25% month-over-month from August's $8.2 billion.

This decline marked the worst monthly performance in UBS's 10-year dataset and follows a sub seasonal August, but the overall trend still points to potential upside for NVIDIA, the analysts said, supported by expectations for a normal seasonal month in October. 

"Assuming a normal seasonal month of October, this implies ~$22.5B of exports for the same 3mo period as NVDA's FQ3 (Oct) - up 21% Q/Q and broadly consistent to slightly better than our +15% model for NVDA's data center revenue," UBS said.

The analysts, however, cautioned against relying to heavily on the correlation between Taiwan's export data and NVIDIA's reported revenue as the variation between the two sets of data "can be significant."

"We would caution that the Q/Q growth for TW and NVDA have differed as much as mid-teens in either direction in recent years, so the data is not definitive," they added.

The latest commentary on UBS comes just days ahead of the Taiwan Semiconductor Manufacturing (NYSE:TSM )'s September sales report due in the next few days, which will provide an additional "read through" for Nvidia.

Source: Investing.com