Nvidia's AI Dominance Expands: Analysts Project $2 Trillion Market Opportunity

Nvidia's TAM rising to nearly ~$2 trillion: analyst By Investing.com

Investing.com -- Bank of America (NYSE:BAC) analysts reiterated a Buy rating on Nvidia (NASDAQ:NVDA) shares after hosting Nvidia executives, including CFO Colette Kress for a dinner earlier this week. Analysts remain confident in Nvidia as a leading AI incubator, noting its unique platform that is driving growth in various sectors including physical AI, AI workstations, and autonomous driving through partnerships with companies like Uber (NYSE:UBER) and Toyota (NYSE:TM). According to BofA, Nvidia is currently positioned at the forefront of a $2 trillion infrastructure opportunity, with the transformation of traditional architectures to accelerated computing and the support of new AI business models. The analysts cautioned, though, that Nvidia stock could face volatility leading up to its Q4 earnings report on February 26, 2023, due to possible enhanced China restrictions. The next GTC conference, scheduled for March 17, 2023, is anticipated to be a significant catalyst for the company. Overall, BofA notes the demand for AI remains robust, with both the Hopper and the new Blackwell platforms showing strong interest. "Hopper run rate is not necessarily tied to demand, but rather to the overall supply situation which can impact the product mix," analysts led by Vivek Arya pointed out. Nvidia has indicated that the Blackwell platform is now available through 15 partners in over 200 configurations, and they expect gross margins to return to the mid-70% range once Blackwell is fully ramped up. Looking ahead, the chip giant remains confident that the demand for AI compute will continue to grow steadily, driven by factors such as model pre-training, post-training, synthetic data generation, and new models like OpenAI's offerings that enable test-time scaling for inference. Nvidia claims it is addressing a nearly $2 trillion opportunity, driven by the shift to accelerated computing and the rise of AI-driven business models. With the current cycle suggesting that the industry is only 20-25% into this long-term growth opportunity, Nvidia's data center sales are projected to reach $113 billion by 2024 and $185 billion by 2025, according to analysts. Nvidia executives also acknowledged the growing interest in custom ASICs but emphasized their limited potential for quickly gaining market share. "The idea of custom ASIC is not new (nearly ten years old today), and it generally takes 2-3 years to develop one, if successful," analysts said. Nvidia highlighted the rapid evolution of AI hardware and software demands, making ASICs less practical, apart from Google (NASDAQ:GOOGL)'s TPU, which was developed years ago. The company also pointed out that its own platform offers a form of customization, with over 200 SKUs for its Blackwell line, enabling flexibility to meet diverse customer requirements, including scale-up and scale-out solutions.

Nvidia's Lead Expands, Analyst Says: 'AI Demand Remains Very Strong' - NVIDIA (NASDAQ:NVDA)

The analyst noted a continued demand for the company's AI chips. NVIDIA Corp NVDA has grown to being among the largest companies in the world due to its AI chip dominance. One analyst sees the Santa Clara, California-based company's lead expanding. The Nvidia Analyst: In a note published Thursday, Bank of America analyst Vivek Arya reiterated a Buy rating for Nvidia with a price target of $190. Main Takeaways: Arya's semiconductor team hosted Nvidia CFO Colette Kress for an investor meeting in Las Vegas. Arya is more confident in Nvidia as an "AI incubator." "NVDA's unique/highly leverageable silicon/system/software platform is spawning new growth engines in physical AI/robotics, onpremise AI workstations (Project Digits), AI PC, autonomous driving (Uber, Toyota partnership) - no other merchant or ASIC rival can match this," the analyst said. Arya noted other positive signs for the company's flagship Blackwell chip. "Overall, the tone for AI demand remains very strong across both Hopper and new Blackwell platforms," the analyst said. "Hopper run rate is not necessarily tied to demand, but rather to the overall supply situation which can impact the product mix. NVDA noted Hopper remains a very capable product for many customers today, but most customers have outlined their desire for (supply-constrained) Blackwell which is now available across 15 partners and 200+ configurations." Arya foresees possible near-term volatility in Nvidia's stock due to possible trade headwinds during the incoming Trump Administration. Price Action: Shares of Nvidia were down 2.8% to $136.14 at the time of publication Friday. Also Read: Dollar Soars To 27-Month Highs, 30-Year Yields Hit 5%, Stocks Tumble As Jobs Report, Oil Spike Darken Fed's Interest Rate Cut Hopes Photo: Shutterstock NVDANVIDIA Corp$135.38-3.38%Overview Rating:Good75%Technicals Analysis1000100Financials Analysis600100WatchlistOverviewMarket News and Data brought to you by Benzinga APIs