SK Group Chairman Warns of Bottlenecks Due to Rapid Growth of AI Data Centers, According to Report
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Oct 28 2025
0mins
Should l Buy NVDA?
Source: SeekingAlpha
AI Data Center Growth: SK Group Chairman Chey Tae-won highlighted that the rapid expansion of AI data centers is causing supply bottlenecks for chips and other essential components.
Global Competition in AI: Chey emphasized the intense global competition in AI, noting that major economies like the U.S. and China have implemented national strategies to gain an advantage.
Event Context: Chey made these remarks during a business event at the APEC summit in South Korea, attended by global business leaders, including U.S. President Donald Trump and Chinese President Xi Jinping.
SK Hynix's Role: SK hynix, a subsidiary of SK Group, is a significant supplier of High-Bandwidth Memory chips to Nvidia, which is positioned to benefit from the growing AI market.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for NVDA is 264.97 USD with a low forecast of 200.00 USD and a high forecast of 352.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 171.880
Low
200.00
Averages
264.97
High
352.00
Current: 171.880
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is a full-stack computing infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. The Company’s segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing platforms and artificial intelligence (AI) solutions and software; networking; automotive platforms and autonomous and electric vehicle solutions; Jetson for robotics and other embedded platforms, and DGX Cloud computing services. The Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems, and Omniverse Enterprise software for building and operating industrial AI and digital twin applications.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Significant Fundraising: The IPO raised $902 million, reflecting strong investor interest in Chinese AI and semiconductor firms, particularly as the public tranche was oversubscribed by more than 700 times and the international offering was nearly 38 times covered.
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- Evolving Policy Landscape: As the Chinese government intensifies efforts for self-sufficiency in advanced chips, the recent approval for Nvidia's H200 imports under specific conditions highlights the uncertainty in policy that could impact market dynamics.
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- Dow Jones Performance: The Dow Jones closed above 50,000 points for the first time on Friday, posting significant weekly gains, indicating a rotation of funds into other sectors and boosting investor confidence.
- Economic Data Focus: Key economic releases, including the nonfarm payrolls report and consumer price index, are set to be released this week, which could influence the Fed's rate decisions, with markets pricing in the first rate cut potentially in June.
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See More
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- AI Memory Chip Progress: Samsung is close to securing Nvidia's certification for its latest AI memory chip, HBM4, with shipments to Nvidia and AMD expected next month, thereby addressing the growing demand for memory chips and enhancing the company's position in the competitive semiconductor market.
- Market Rebound: Tech stocks and the broader market rebounded on Friday, with Nvidia shares rising nearly 8%, reflecting investor confidence in the recovery of the chip industry, although Nvidia's stock remains down 11% from its peak on November 3, indicating market volatility.
- Supply-Demand Dynamics: The ongoing shortage of memory chips has driven up shares of chipmakers like Micron, SanDisk, and Western Digital, as investors anticipate robust demand and rising prices, providing a favorable backdrop for Samsung's market performance.
- Regulatory Challenges: Nvidia is awaiting approval for the sale of its H200 chips in China; while Beijing is close to approving imports, the U.S. is considering additional restrictions, and this complex diplomatic situation may impact Nvidia's market performance and stock price fluctuations.
See More
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- Historical Trend Analysis: The Dow Jones Industrial Average surpassed 50,000 on February 8, 2026, and historical data indicates that significant psychological milestones typically do not lead to market downturns; instead, they often propel the index higher, as seen with a 19% increase following the 30,000 mark.
- Earnings Drive: The continuous growth of corporate earnings among Dow components is a critical factor driving stock prices upward, and if this trend persists, the index is expected to keep rising, reflecting strong economic fundamentals.
- Macroeconomic Factors: While macroeconomic indicators such as inflation, interest rates, and GDP growth can impact the market, there are currently no signs of dramatic negative swings in these metrics, maintaining an optimistic market sentiment.
- Future Outlook: Despite the risks of an AI bubble burst, the Dow's composition has a low proportion of tech stocks, with major components like Goldman Sachs and Caterpillar likely to continue supporting the index, prompting investors to prepare for a potential rise to 60,000.
See More
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- Market Value Surge: Since the beginning of 2023, Nvidia has added $3.9 trillion in market value, becoming Wall Street's most valuable public company, reflecting its strong competitive advantages and market demand in the AI sector.
- GPU Dominance: Nvidia's GPUs account for over 90% of the market in AI data centers, ensuring the company's leading position in technological innovation with superior computing capabilities and a gross margin of 70%.
- Innovation Cycle Risks: While Nvidia's strategy of launching a new GPU annually aims to maintain its competitive edge, this rapid innovation could lead to a depreciation of older chips by 30% to 50%, potentially affecting customer upgrade decisions and future demand.
- Software Platform Support: The CUDA software platform enhances customer loyalty to Nvidia's products, and ongoing technological advancements keep older chips highly efficient, which may slow down demand for new GPUs.
See More
