Nvidia (NASDAQ:NVDA) shares have been on an almost constant upward trajectory for the past couple of years. But is there anything that could disrupt the AI chip giant’s impressive momentum?
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According to Piper Sandler’s Harsh Kumar, a 5-star analyst ranked in the top 1% of Wall Street stock pros, the short answer is no, there isn’t any indication that something is about to pull the stock back down right now.
In fact, quite the opposite. The shares are about to get another leg up and that demands another bullish assessment. As such, due to the company’s “dominant positioning” in AI accelerators and the upcoming launch of the Blackwell architecture, Kumar has now made Nvidia his ‘top large-cap pick.’
“Our viewpoint is rooted in the belief that the overall TAM 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,” Kumar said, explaining his stance.
Blackwell availability and supply have been a key theme in any recent Nvidia discussions and Kumar thinks the new chip will be generally available in the January quarter and is “expected to account for several billion dollars of revenues.”
Historically, Nvidia has outperformed against Street expectations during the early phases of product rollouts. So, while Kumar recognizes the supply constraints, he believes Nvidia could generate between $5 billion and $8 billion in Blackwell revenues in the January quarter, with his bias “skewed to the upper end of the range.” Kumar anticipates demand for the H100 and H200 will still be spread across the cloud, enterprise, and sovereign sectors. However, the initial supply of Blackwell in the January and April quarters will likely prioritize hyperscalers.
And hyperscalers have no intention to rein in capex. Big compute capex spenders such as Microsoft and Meta have indicated that their spending on compute will either remain stable or grow as a percentage of total spending. “All else equal,” Kumar goes on to say, “we see at least sustained levels of capex through 2025, if not accelerated with a shift towards chips & servers and spend away from buildings and other fixed property.”
To this end, Kumar rates NVDA shares an Overweight (i.e., Buy), while raising his price target from $140 to $175, suggesting the stock will gain ~20% in the months ahead. (To watch Kumar’s track record, click here)
Kumar’s view aligns with the broader Wall Street consensus, where Nvidia holds a Strong Buy rating based on 39 Buys and 3 Holds. The average price target of $157.82 suggests an ~8% gain over the next year. (See Nvidia stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
