Mizuho analyst Vijay Rakesh is highly optimistic about Nvidia Corp.'s stock prospects, especially when considering the vast opportunities in the field of artificial intelligence. According to Rakesh, Nvidia is currently "dominating" the market for AI servers and he believes the company will continue to hold a significant share of the market despite potential competition in the future. In fact, Rakesh estimates that Nvidia could unlock $300 billion in AI-related revenue by 2027.
Explosive Growth in AI Revenue
Rakesh predicts that Nvidia's AI revenue opportunity for this year alone could range between $25 billion to $30 billion. He bases this projection on the assumption that the company will ship around 100,000 AI units at average selling prices of $250,000 to $300,000. Although he anticipates a decline in average selling prices to approximately $200,000 by 2027, Rakesh foresees a massive increase in unit sales, potentially reaching 1.5 million AI servers.
Upward Potential for Nvidia Shares
Despite the significant 200% increase in Nvidia shares this year, Rakesh believes there is still room for growth. He has revised his price target for the stock from $400 to $530, emphasizing that this new target is a conservative estimate.
The Untapped Potential of Nvidia's AI Value
According to Rakesh, the positive impact of AI on Nvidia shares could be even greater than what the current price target suggests. He asserts that there is an additional value of approximately $20-$300 per share waiting to be unlocked. This indicates a potential value per share for Nvidia in the range of $486-$760. Rakesh continues to recommend buying the stock.
Intel's Incremental Revenue from AI
Rakesh has also adjusted his price target for neutral-rated Intel Corp. shares, raising it from $30 to $33 in his latest report. While he acknowledges that Intel may generate some additional revenue from the AI revolution, he expects its growth to be more subdued compared to competitors like Nvidia and Advanced Micro Devices Inc. As a result, Rakesh maintains his buy rating and a price target of $140 for AMD shares.
In conclusion, Nvidia's strong position in the AI server market and its potential for significant revenue growth have contributed to an optimistic outlook for the company's stock. Rakesh's analysis and revised price targets demonstrate the confidence he has in Nvidia's ability to capitalize on the AI opportunities ahead.