Nvidia's Liquid Cooling Market Projected to Reach $4.8 Billion by 2027
- Morgan Stanley reports a potential $4.8 billion opportunity in the development of GPU cooling systems for Nvidia.
- The bank emphasizes that liquid cooling systems could help alleviate power shortages in data centers.
- This move could signify a significant shift in how Nvidia approaches its hardware performance and efficiency.
Nvidia's GPU server rack systems are poised to drive a significant market for liquid cooling solutions, projected to reach $4.8 billion by 2027, according to a recent report from Morgan Stanley. The bank highlights that these systems are essential to address "power shortage pressures" in data centers, particularly for Nvidia's GB200 server rack, which is expected to dominate the market as generative artificial intelligence tools continue to proliferate. The report notes that the cost of implementing a liquid cooling system for the GB200 GPU server is approximately $82,460 per rack, significantly higher than traditional air-cooling systems for Nvidia's H100 GPU rack, which are 15 to 20 times less expensive. This shift towards liquid cooling is seen as a necessary evolution in data center technology to enhance efficiency and performance. Morgan Stanley identifies several companies that could benefit from this trend, including Vertiv, Schneider Electric, Taiwanese firm AVC, and Delta Electronics. The bank particularly favors Delta, anticipating an additional $280 million in AI cooling revenue by 2025 due to its liquid cooling solutions. Furthermore, AVC has been recognized as a key partner for Nvidia's GB200 cold plate, which is integral to the liquid cooling system. In light of these developments, Morgan Stanley has raised its price target for Nvidia's stock from 400 to 488 New Taiwan dollars, indicating a potential upside of around 26%. The report also suggests that AVC is expected to capture 30% of the supply share for shipments in 2025, reflecting a promising outlook for the liquid cooling market.