Top pick NVIDIA's potential upside is significant - New Street Research
New Street Research named NVIDIA (NVDA) as one of its top picks for 2024 in a recent note, noting the total addressable market (TAM) for AI data center chips.
«The $400bn TAM for AI data center chips AMD pitched last month may eventually prove wrong but must be considered seriously. It is a possibility and the direction of travel for now,» wrote analysts.
«In that context, the outlook for 2025 should clarify and improve steadily this year, while ASICs and AMD will get understood for what they are: challengers at best travelling along with Nvidia (NASDAQ:NVDA),» they added, maintaining a Buy rating and $700 per share price target on the stock, representing a potential 43% upside.
New Street Research believes that reasonable assumptions on usage and model complexity can justify an AI server installed base growing 5x by 2027.
«10m AI servers installed in 2027 requires close to 50m chips shipped in 2027, adding up to $400bn,» said analysts. «Even if the $400bn scenario materializes partially, the upside for Nvidia is significant. We value Nvidia 30X 2025 EPS of $23.»
Read more on investing.com
