Nvidia (NASDAQ:NVDA) CEO Jensen Huang has never been shy about predicting massive growth for the AI industry. While his bullish forecast initially drew some skepticism, it seems the ‘Godfather of AI’ was right on target after all.
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That appears to be the conclusion reached by Barclays’ Tom O’Malley, an analyst ranked among the top 3% of Street stock experts. O’Malley notes that when Huang first forecast a $1 trillion industry by the end of the decade, he “admittedly balked.”
But when looking at AI capacity growth over the past twelve months, AI TAMs (total addressable markets) “don’t seem so outlandish anymore.”
Over the past six to nine months, there has been a “wave of announcements,” and O’Malley now sees over $2 trillion in planned AI spending, totaling around 40GW of power. About 65–70% of that is focused on compute and networking, with more deals probably still in the pipeline, making the updated $3–4 trillion guidance looking “much more real.”
Because the data for each project varies, O’Malley has calculated the estimates in two ways: first, by converting 1GW into roughly $50–60 billion of total spend, and second, using the more recent benchmark of 1 million GPUs per 2GW from last week’s OpenAI deal. Combined, this gives about $1.5 trillion in compute and networking spend and around 19 million GPUs. The analyst does concede this isn’t a perfect pro-forma calculation and that some of the spend will inevitably go toward custom silicon, but so far, the announcements offer little detail on specific programs.
O’Malley thinks that a good indicator of the incoming AI surge might be the backlog growth at the four major hyperscalers (AMZN, MSFT, GOOGL, ORCL). Over the past year, this was running around 30%, but it jumped to 86% in the last quarter, pushing the total backlog past $1 trillion for the first time – largely driven by a spike in Oracle’s backlog. On the AI adoption side, ChatGPT provides a useful reference point: message volumes in June 2025 were up 482% year-over-year, and weekly active users rose more than 250%, offering a “decent proxy for overall usage of AI.”
The AI spending wave is a positive for all accelerator names, with O’Malley believing both Broadcom and AMD will benefit, though not to the same extent as Nvidia.
“We see this largely flowing into the NVDA P&L over the next 5+ years, moving numbers materially higher and making this the most attractive name in our space,” the 5-star analyst summed up.
Accordingly, O’Malley assigns NVDA shares an Overweight (i.e., Buy) rating, while raising his price target from $200 to $240, implying the stock will gain ~36% over the one-year timeframe. (To watch O’Malley’s track record, click here)
By comparison, the Street’s average price target stands at $212.57, which implies 20% upside from current levels. In terms of ratings, NVDA carries a Strong Buy consensus based on 35 Buys, 2 Holds, and 1 Sell. (See NVDA stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.