After top analysts on Wall Street outlook called for a bullish outlook on this tech giant, Nvidia's stock price rose on Monday's initial trading, extending its impressive autumn increase.
Since early September, Nvidia's (NVDA) market cap has increased by about $780 billion, surpassing Microsoft (MSFT) last week to become the world's second-largest company in value, as investors continue to price its worth in the global market for AI chips and processors amid a booming multi-billion dollar investment.
In fact, their closest competitor, Advanced Micro Devices (AMD), told investors last week that the market for AI accelerators could reach $500 billion within three years, a 25% growth from previous forecasts, with these chips powering large language models for Microsoft, Alphabet (GOOGL), and Meta Platforms.
Last year, the same market was valued at around $45 billion.
Nvidia's role in the current market downturn and its impact on the broader economy through technology investments is equally compelling: estimated to account for around 14% of all market capital expenditures by 2026 at the current projected rate.
Last week, Nvidia's stock surpassed Microsoft to become the world's second-largest company, with a market cap 5% lower than Apple, standing at below Apple's $3.46 trillion.
Citigroup analyst Atif Malik reiterated his $150 target price and 'buy' rating on Nvidia stock in a note released on Monday, highlighting the significant part the group holds in the billions of dollars already committed by U.S. cloud providers.
Nvidia will report earnings on November 19. According to Bloomberg's consensus estimate, Wall Street analysts expect the company's revenue to reach $33 billion, an 82% increase from the previous year. About 90% of analysts tracked by Bloomberg recommending buying Nvidia's stock.
Nvidia: Blackwell production increased
Malik and his team wrote that Nvidia remains the leader in the installation of super-scale ai accelerators in the U.S. Out of the top 4 super-scale machines (2021-2024E), Nvidia holds a 67% share of the total ai accelerator installation base. "Nvidia benefits from its chip performance leadership, strong scalability, and large installation base, supporting enterprises in adopting a multi-cloud strategy."
Malik said Nvidia may introduce its new Blackwell platform, along with its traditional Hopper chip, driving a 118% increase in GPU sales this year and a further 84% growth in 2025.
This will represent approximately 31% of all U.S. cloud provider capital expenditures this year, and around 35% the following year.
"We predict that GPUs and ASICs will coexist in driving the construction of AI/ML infrastructure. ASICs will be used for specialized models and differentiated cloud ai products, while GPUs will handle training and inference of larger, more complex models."
"Given the continued strong demand for Nvidia products, and AMD raising its ai [addressable market total] to $500 billion by 2028, we now expect an ai accelerator [addressable market total] of $380 billion by 2028, with ai GPUs accounting for approximately 75%."
Meanwhile, Goldman Sachs analyst Toshiya Hari cited Nvidia's potential benefit from increasingly complex ai workloads in a note released on Monday. The group outlined this in updated documents last week, raising the target price by $15 to $150 per share.
Nvidia believes that as super scalers build their massive datasets, the increasing complexity of ai inference will drive an increase in computational demand.
Nvidia stated in a speech last week that training computing is experiencing exponential growth with larger models, multimodalities, reinforcement learning, and synthetic data generation.
The presentation supplement further mentioned that inference computing is expanding exponentially, with larger modalities, multimodalities, large contexts, low word counts, and now long 'thinking time.'
Nvidia told investors in late August that despite some delays in shipments of its new Blackwell series processors due to design changes and supply chain roars, its revenue for this quarter was $32.5 billion.
Chief Financial Officer Colette Kress stated that Blackwell is expected to generate "billions of dollars" in revenue for Nvidia's fourth quarter, which ends in January, adding that traditional Hopper sales will accelerate in the second half of this year.
Nvidia CEO Jensen Huang: Hopes the company will have 50,000 employees, and 10 billion AI assistants.
Nvidia CEO Jensen Huang stated today that he hopes Nvidia will eventually deploy 100 million AI assistants to further enhance the company's productivity. He also emphasized that this will not result in job cuts. In the 'Bg 2' podcast released on Sunday local time, Jensen Huang said: 'I hope Nvidia will one day become a company with 50,000 employees and equipped with 10 billion AI assistants across the company's departments.' Jensen Huang also envisioned a future where Nvidia will deploy AI agents across all company departments on a large scale to enhance output. At that time, the AI agents will break tasks down into smaller steps, each handling a specific task to achieve broader goals.
Nvidia stocks rose 1.1% in pre-market trading, indicating an opening price per share of $136.25.
