JPMorgan analysts said in their latest report released on Thursday that Nvidia is shifting its short distance data transmission in artificial intelligence data centers from fiber optics to copper cables, marking a significant increase in copper demand in the future. In addition, this trend is expected to boost related copper stocks.
Last week, the NVIDIA GTC conference not only ignited the AI chip market, but also sparked heated discussions about the copper cable products used on the chips. According to Huang Renxun, the GB200 adopts NVLink technology with 72 Blackwell GPUs fully interconnected, and has over 2 miles of NVLink copper cables, demonstrating the enormous potential of copper cable connections in high-performance computing.
It is reported that Nvidia's move is to reduce the power consumption of its data center equipment, and the large-scale use of copper has indeed exceeded the expectations of many industry insiders. The company points out that using copper instead of optical devices can save 20 kilowatts of electricity per server rack.
Amit Daryanani, an analyst at Evercore ISI, stated in a customer report that Nvidia's shift from optics to copper is a major topic of discussion. He said, "A key factor in using more copper is liquid cooling, which allows for more GPUs (graphics processing units) to be loaded into a single rack."
According to the basic forecast of the International Energy Agency (IEA), global data center electricity demand will grow at a compound annual growth rate of 15% by 2026. JPMorgan estimates that by 2030, this growth rate will require a cumulative increase of approximately 2.6 million tons of copper demand. The bank said this will also translate into around 2% of the expected global copper demand by 2030.
The bank wrote, "The exponential growth of artificial intelligence computing power in the next decade... will require extraordinary growth in global electricity capacity."
Xiaomo also stated that with the emergence of new demand for copper, it is expected that the supply gap of copper will reach 4 million tons by 2030. The report states that the growth of pure electric vehicles and renewable energy, coupled with limited supply of new copper mines, is the reason they predict a shortage of copper.
Copper stocks are receiving attention
JPMorgan Chase has highlighted three companies in its "copper stocks". The company claims that Teck Resources is its "first choice" in North America.
In addition, it also chose Anglo American and Sandfire listed on the Australian Securities Exchange. Sandfire is a sustainable mining company that has transformed into a significant global copper producer.
Other major copper stocks include Freeport McMoRan and Southern Copper Corporation.