Significantly lowered the GB200 shipment forecast for this year, Morgan Stanley is bearish: the cloud market may peak this year!

Is the cloud computing industry cycle peaking? NVIDIA issues a shipment warning! Morgan Stanley lowers GB200 expectations. Morgan Stanley released a latest research report stating that it has significantly lowered its 2025 shipment forecast for NVIDIA's GB200 from the previous 30,000-35,000 units to 20,000-25,000 units, with the worst-case scenario potentially falling below 20,000 units. This downgrade could lead to a market impact of $30 billion to $35 billion on the GB200 supply chain, putting immense pressure on related supply chains and semiconductor companies. As for the reasons for the downgrade, Morgan Stanley indicated that the slowdown in capital expenditure growth from one of the main customers of the GB200 chip, Microsoft, has negatively affected the supply chain. Additionally, the cloud computing and AI infrastructure ecosystem is immature, particularly with insufficient network and power infrastructure related to the GB200, which has limited the deployment of the GB200 due to the supply chain not keeping up with demand. At the same time, there are also disputes in the market regarding the efficiency of large language models (LLM), such as the related disagreements between DeepSeek and Microsoft, which are expected to persist until 2025, making it difficult for the market to reassess the value of these stocks. Furthermore, according to cyclical patterns, the growth rate of capital expenditure in the cloud computing industry may slow to single digits in the fourth quarter of 2025. The industry cycle may peak in 2025 Morgan Stanley pointed out that capital expenditure in the cloud computing industry is cyclical. Historical data shows that the cloud computing industry typically experiences a growth cycle of 2-3 years, followed by a downturn of 2-4 quarters. The downturn is mainly characterized by a slowdown in year-on-year growth among major U.S. cloud service providers. Latest data indicates that, thanks to market investments in GPU servers, cloud computing capital expenditure has begun to rebound after hitting a low in the second and third quarters of 2023, with a year-on-year growth of 62% in the third quarter of 2024, higher than the 59% in the second quarter, demonstrating strong growth momentum. However, Morgan Stanley believes that if historical patterns repeat, this growth cycle may continue until the first half of 2025. As the market gradually approaches the peak of the cycle, it is expected that the year-on-year growth rate will slow to single digits in the fourth quarter of 2025. Additionally, investors' expectations for growth in GB200 supply chain stocks may be overly optimistic, which could weigh on high P/E ratio cloud computing stocks. Moreover, the Chinese market also hit a low in the second and third quarters of 2023, with year-on-year declines of 24% and flat growth, respectively. Subsequently, Tencent and Alibaba began to accelerate capital expenditure due to investments in AI servers. Baidu also showed strong momentum in spending on AI infrastructure, but due to ample GPU inventory, it has started to decline recently. Overall, the Chinese market is also actively procuring AI servers, particularly NVIDIA's H20 series