Nvidia (NASDAQ:NVDA) has built its all-conquering march to the top of the market cap ranks on an unmatched position in the AI chip world. Having secured its dominance in this segment, another major wave of growth could now be on the horizon.
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In fact, Loop Capital analyst Ananda Baruah believes that momentum is already building, pointing to fieldwork that signals we are “entering the next ‘Golden Wave’ of Gen AI adoption,” with the Jensen Huang-led company set to reap the rewards once again.
“NVDA is at the front-end of another material leg of stronger than anticipated demand (much like we saw in 2023 into 2024),” the analyst went on to say.
In short, the analyst argues that Hyperscale is far bigger than most people realize. Baruah’s analysis suggests Hyperscalers are on track to significantly ramp up their use of non-CPU compute – like GPUs, custom silicon, and AI accelerators – from around 15% today to between 50% and 60% of total compute by 2028, which could represent close to $900 billion on its own.
At the same time, Nvidia’s AI Factory initiative, which targets non-Hyperscaler customers, appears to have a clear path to tens of gigawatts of demand over the next two to three years, equating to a potential $450 to $900 billion opportunity, by Baruah’s estimates.
“NVDA is sitting right in the middle of quickly converging dynamics which they both have worked to empower and are now material beneficiaries of,” the analyst further explained.
Meanwhile, Blackwell has officially arrived. After some initial yield challenges with the B200 leading into the March quarter, followed by a temporary slowdown in the June quarter as customers held off for the B300 (with deliveries set to begin in July), Nvidia is now on track to reach full-scale production by the October quarter. Baruah’s “bottom-up checks” also support his broader outlook, with GPU shipments in 2025 and 2026 expected to hit around 6.5 million and 7.5 million units respectively (excluding China), with average selling prices near $40,000.
Driving these numbers higher, Baruah points out, is the surge in reasoning models, which are far more compute- and token-intensive than initially realized and were not even accounted for in most forecasts before November 2024. Nvidia’s GB200/300 NVL72 architecture is well-positioned to serve these demanding workloads, for both training and inference.
Adding yet another dimension to Nvidia’s positioning is the rise of Neoclouds, which Baruah describes as having become Nvidia’s “de-facto Data Center Arm.” Over the past nine months, Nvidia has strategically shifted its posture to treat these partners almost as extensions of its own infrastructure, strengthening the company’s long-term ecosystem advantage.
With all these growth catalysts aligning, Baruah believes a higher price target is justified — and he is setting a Street-high forecast at $250, suggesting Nvidia shares could rally 62% over the next year. It hardly needs adding but Baruah’s rating stays a Buy. (To watch Baruah’s track record, click here)
It’s mostly Buys elsewhere on the Street too; 34 other analysts join the bull camp and with an additional 4 Holds and 1 Sell, the consensus view is that this stock is a Strong Buy. At $175.28, the average price target factors in a one-year gain of 11%. (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.