Nvidia's AI Dominance Fuels Optimistic Analyst Projections and Stock Surge

Piper Sandler names Nvidia a top pick, sees shares rising nearly 20% after blockbuster year

Nvidia is a 'most-own' stock, according to Piper Sandler. The investment firm named the semiconductor giant its top large-cap pick, citing the launch of Nvidia's upcoming Blackwell chip and lead within artificial intelligence computing. Analyst Harsh Kumar stood by his overweight rating on the stock and raised his price target to $175 from $140. Kumar's updated price forecast is about 19% above where the stock closed Friday. Year to date, shares have soared 198%. NVDA YTD mountain NVDA YTD chart "Our viewpoint is rooted in the belief that the overall [total addressable market] for AI accelerators will continue to rise in 2025 by ~$70 billion, and we see NVDA well positioned to capture most of the incremental TAM increase while ceding only a small bit to its merchant chip competitors," the analyst wrote. AI accelerators are components that make artificial intelligence and machine learning applications more efficient. Capital expenditure trends continue to be favorable at major tech companies, as seen in the latest reports from Microsoft, Meta and Amazon, the analyst said. Kumar thinks that these spending levels could be sustained through 2025. "We think this clearly benefits NVDA in the near to mid-term future and as such, we are taking our numbers up slightly for the January quarter and subsequent FY26 quarters," the analyst added. Additionally, Nvidia's Blackwell chip should become available in the first quarter of next year and could bring in between $5 billion to $8 billion in revenue, Kumar said. "As supply improves, we see more customers coming on for Blackwell beyond initial hyperscaler adoption in the following April quarter," Kumar wrote. "Given expanded GPU allocations and initial shipments of the Grace Blackwell for inference applications, we are projecting Blackwell architecture revenues could increase to the tune of 200%+ in the April quarter following supply constraints."

Piper Sandler is calling Nvidia their top pick among large-cap stocks. Here's why By Investing.com

Investing.com - Nvidia (NASDAQ:NVDA) is "well-positioned" to capture most of the expected growth in the market for specialized artificial intelligence-enhancing hardware in 2025, analysts at Piper Sandler said in a note to clients calling the chipmaker its "top large-cap pick." The analysts led by Harsh Kumar predicted the multibillion-dollar total addressable market for these so-called AI accelerators will increase by roughly $70 billion in 2025. These accelerators help power AI in devices like mobile phones and laptops, while also playing a crucial role in cloud computing servers. Described by some experts as a "moat," Nvidia's AI graphics processors, such as its H100 offering, have become crucial components in the push to train and deploy AI models. Nvidia's latest AI chip, known as Blackwell, is also seeing strong demand even before it has been launched to the public, the company's Chief Executive Jensen Huang has noted. The Piper Sandler analysts estimated that Blackwell should be released to the general public in Nvidia's January quarter, adding it is expected to account for "several billion dollars of revenues." "[W]e see [Nvidia] well positioned to capture most of the incremental [total addressable market] increase while ceding only a small bit to its merchant chip competitors," the analysts said. They projected that Blackwell sales alone will be at the upper end of the $5 billion to $8 billion range despite lingering concerns over tight supplies. While the soaring demand for AI chips has boosted semiconductor groups like Nvidia, the trend has also left these firms struggling to provide enough chips. The Piper Sandler analysts said the constraints will likely continue through at least the first half of the 2025 calendar year. Still, Nvidia's market cap jumped by 9.3% to $3.26 trillion in October, fueled in part by a robust AI demand outlook from Taiwan Semiconductor Manufacturing Corp -- the world's biggest contract chipmaker. Nvidia, which is due to report its latest quarterly results on Nov. 20, was valued at $3.62 trillion prior to the start of trading on Wall Street on Monday (NASDAQ:MNDY).

Buy Nvidia as AI adoption is still in the early stages, Redburn Atlantic says

Nvidia 's still in early growth stages as artificial intelligence capabilities continue to progress, according to Redburn Atlantic. Analyst Timm Schulze-Melander initiated the stock with a buy rating and a price target of $178, which implies upside of 22.5%. Looking ahead, the analyst sees the AI powerhouse boasting 65% EBIT margin expansion and compound annual earnings growth of 38% between 2024 and 2030. "Such growth over a six-year period is aligned with prior adoption cycles. Our analysis finds that 18 years is the average duration of the 'adoption phase' growth for new technologies," he said. NVDA YTD mountain Nvidia performance this year. "Nvidia has exploded into the public consciousness. However, given the stellar share price performance, questions have emerged regarding the durability of the AI market as well as the technological sustainability of Nvidia's position and financial returns," the analyst wrote in a note to clients. "We see two primary growth engines that the market underestimates." The first growth driver is in accelerated computing, which aims to make AI data processing more efficient, Schulze-Melander said. The chipmaker has the largest installed base of graphic processing units, a dominant software interface and the largest installed base of application libraries -- the latter which gives the company a strong competitive position with it products and customers, according to the analyst. The second factor behind Nvidia's growth case is the market's underestimation of demand for the company's products and services -- even as rivals try to curb the chipmaker's dominance. "These customers are committed to Nvidia's Compute Unified Device Architecture (CUDA) software and rely more heavily on Nvidia's system-level solutions. The CUDA software moat, with integrated applications libraries and a 12-month innovation cycle, means that Nvidia's rivals are unlikely to usurp its market dominance," Schulze-Melander said. Nvidia has been on a tear, up 193.3% year to date. That makes it the third-best performing S & P 500 stock of 2024.

Redburn Atlantic launches coverage of Nvidia with "Buy" rating By Investing.com

Investing.com - Accelerated computing power and demand from enterprise, government and cloud service providers are both due to drive growth at artificial intelligence-darling Nvidia (NASDAQ:NVDA), according to analysts at Redburn Atlantic. In a note to clients, the analysts led by Timm Schulze-Melander said these trends underpin their expectations that Nvidia will post a "sustainable" 65% earnings before interest and taxes margin. Compound annual growth in per-share income is also tipped to be at 38% between this year and 2030, they added. The analysts launched their coverage of Nvidia's stock with a "Buy" rating and a price target of $178. Nvidia is due to report its latest quarterly results on Nov. 20, with investors on the lookout for any guidance from the chipmaking titan about demand for its AI-enhancing hardware heading into 2025. Some analysts have come to view the release of the figures as equivalent in importance for markets as the US jobs report or consumer price data. Nvidia, which manufactures semiconductors that are considered to be crucial components in training and deploying AI-powered applications, has become a focal point of runaway enthusiasm around the nascent technology. Shares in the company have surged by more than 200% so far this year, a sharp rally that has also fueled its outsized impact on US stock markets. Much of the year-to-date gains in the benchmark S&P 500 has been driven by the spike in Nvidia. Big Tech players like Google-owner Alphabet (NASDAQ:GOOGL) and Amazon (NASDAQ:AMZN) are among Nvidia's largest customers, spending heavily on its products to run their own all-important AI innovations. As a result, Nvidia's earnings can serve as a gauge of the state of the AI boom, particularly at a time when investors are beginning to call for more evidence that the steep AI expenditures are leading to tangible returns. CEO Jensen Huang said in August that demand for Nvidia's current-generation Hopper chips was "strong," although the company's guidance for third-quarter revenues of $32.5 billion -- plus or minus 2% -- was only slightly above Wall Street projections. Analysts noted that, due to Nvidia's recent track record of far outpacing expectations, even a modest beat was enough to disappoint investors. Meanwhile, Chief Financial Officer Colette Kress laid out a timeline for the production of Nvidia's next-generation Blackwell chips. Kress said output of the processor -- which was delayed earlier this year -- is now tipped to ramp in the fourth quarter and continue into Nvidia's 2026 fiscal period. "In the fourth quarter, we expect to ship several billion dollars in Blackwell revenue," Kress said.