Investors love a good long-term growth story. NVIDIA Corporation (NASDAQ: NVDA) has certainly been one of the top-five long-term growth stories of the last three decades in Corporate America. And NVIDIA has made many investors rich along this journey. Wall Street doesn’t care about the past — it wants to know what a company can do looking ahead!
Now that NVIDIA has recovered handily from its losses in early April and is back above a $3 trillion market cap, many investors want to know just how much the top benefactor and leader of A.I. spending can grow in the years ahead. The law of large numbers would lead most of us to believe it cannot grow tenfold. But it has to be able still grow if has over a $3 trillion valuation now, right?
What if NVIDIA’s growth will remain a secular trend rather than seeing maturing trends that strategic investors will move in and out of?
TD COWEN MAKES A PREDICTION
TD Cowen has opined that NVIDIA can still dominate the A.I. chip market for at least the rest of this decade. The analysts at TD Cowen are forecasting that the total market for A.I. processors will grow to $334 billion in 2030. That’s much more than twice the $117 billion market just in 2024.
NVIDIA already has a commanding position in A.I. chips and processors. TD Cowen believes NVIDIA will maintain an astonishing 90% of the market for GPUs. The firm sees its revenue from AI chips rising to $262 billion in 2030, up from about $100 billion in 2024.
But what about the other A.I. chipmakers? While companies like Broadcom Corp. (NASDAQ: AVGO) and Marvell Technology (NASDAQ: MRVL) are seeing wonderful A.I. growth, TD Cowen believes that the market share for custom chips in the A.I. space will rise to just 15% from about 10% at this time.
Another issue brought up by TD Cowen is that those custom A.I. chips will continue to offer lower performance than NVIDIA’s A.I. chips. And the report also points out that NVIDIA has the most mature offering in A.I. of technology choices over the entire hardware, software, and networking ecosystems.
The competition in custom A.I. chips and traditional chips is also nothing new. Amazon.com (NASDAQ: AMZN) launched its own chip five years ago and Alphabet Inc. (NASDAQ: GOOGL) released an A.I accelerator ten years ago.
After all that, NVIDIA is still the go-to source for most A.I. chip demand even as both companies have launched successor versions of what they produced years before. And Elon Musk of Tesla Inc. (NASDAQ: TSLA), DOGE and xAI has already said he would continue to order large amounts of chips (next-gen GPUs) from NVIDIA and Advanced Micro Devices, Inc. (NASDAQ: AMD).
The TD Cowen report’s summary said:
We see Nvidia’s leading technology portfolio, long pedigree of innovation, and extensive growth-oriented investments driving strong accelerator growth in the coming years.
The overall consensus expectations are also forecasting strong growth ahead for NVIDIA. After sales of $130 billion last year, consensus estimates are projecting total sales of about $200 billion this year and almost $250 billion in fiscal year 2027. That would then leave the next three years for NVIDIA to reach that $300 billion in annual revenues — valuing NVIDIA today at about 11-times 2030 annual revenues.
DISCLAIMER BELOW
Please note that all analyst ratings and their price targets mentioned in this summary were issued by each firm by name. Oggonomics does not issue any formal ratings and price targets of its own on NVIDIA and the companies mentioned in this summary. No analyst report, even those with very strong conviction, ever comes with any guarantees of profits and they never contain money-back guarantees in case you lose money.
Oggonomics always reminds its readers that no single analyst report should ever be the sole basis to buy or sell a stock. Analysts can get their thesis wrong just like the rest of us. And sometimes the market or a company’s fundamentals can change in the blink of an eye.
