Nvidia's AI Chip Market Outlook Remains Optimistic
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: Fool
- Rising AI Infrastructure Spending: Spending on artificial intelligence infrastructure is expected to keep rising, with TSMC projecting mid-to-high 50% annual growth in AI chip revenue, creating significant market opportunities for companies like Nvidia.
- Nvidia's Market Share Growth: Nvidia commands about 90% market share in the GPU market, and its networking revenue skyrocketed 162% last quarter to $8.2 billion, far exceeding the 56% growth in compute revenue, underscoring its leadership in AI infrastructure.
- Future Revenue Projections: Nvidia is projected to generate $213.4 billion in revenue for the fiscal year 2023, and if it maintains a 37.5% compound annual growth rate, its revenue could reach approximately $1.4 trillion by fiscal 2031, indicating strong growth potential.
- Profitability Outlook: Assuming Nvidia's gross margin remains at 73%, it could achieve $792 billion in adjusted net income by 2031, translating to about $32.50 earnings per share based on current share count, with stock price estimates ranging from $650 to $815 by the end of 2030, highlighting solid investment value.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for NVDA is 264.97 USD with a low forecast of 200.00 USD and a high forecast of 352.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 192.510
Low
200.00
Averages
264.97
High
352.00
Current: 192.510
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is a full-stack computing infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. The Company’s segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing platforms and artificial intelligence (AI) solutions and software; networking; automotive platforms and autonomous and electric vehicle solutions; Jetson for robotics and other embedded platforms, and DGX Cloud computing services. The Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems, and Omniverse Enterprise software for building and operating industrial AI and digital twin applications.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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