Mizuho analysts conducted a deep-dive analysis of the broader server landscape and broader AI outlook amid expectations that GenAI (generative AI) will continue to drive demand.
They see “a significant opportunity for GPU supplier NVDA” with the TAM (total addressable market) expanding 10 times over the next 5 years to more than $400 billion.
“We see AI server unit penetration reaching ~11% by C27E, and NVDA, with conservative ~75% share (vs. 90%+ today), potentially driving ~$300B in AI-specific revenue,” they said in a client note.
Advanced Micro Devices (NASDAQ:AMD) is expected to have a ~5% of AI server share by 2027. The analysts also highlighted Amazon’s (NASDAQ:AMZN) AWS Inferentia, Tesla’s (NASDAQ:TSLA) Dojo, or Alphabet’s (NASDAQ:GOOGL) Google that could capture AI market share gains.
“We see more room to unlock value with solid AI roadmaps accelerating.”
Despite robust YTD gains in Nvidia (NASDAQ:NVDA) stock, Mizuho sees room for this rally to continue.
“Assuming $30-100B AI revenues (or ~$65B at the midpoint), we estimate implied share price to reflect AI estimates for C23-25E would be $490-$769/share, and a midpoint at ~$625 PT,” the analysts concluded.
The $769/share price implies Nvidia’s market cap at ~$1.9 trillion.
Mizuho’s current price target on NVDA stock is $530 per share.