Nvidia (NVDA 3.10%) It is one of the most popular stocks in the market in recent years. The stock has increased 840% since December 2022 on the back of strong demand for the company’s graphics processing units (GPUs). GPUs are essentially the chips that power all cutting-edge artificial intelligence systems.
Nvidia is currently worth $3.3 trillion, but some Wall Street analysts see upside coming from the company’s Blackwell GPU and robotics computing solutions. Good news for Nvidia shareholders.
Nvidia’s Blackwell GPUs could be a bigger success than most analysts expected
Last week, Barclays’ Tom O’Malley raised his price target for Nvidia to $175 per share from $160. This forecast implies an upside of nearly 28% from the current share price of $137. He cited expectations that Nvidia’s next-generation Blackwell GPUs will drive a significant increase in sales growth as the reason for the upward revision.
Remember, Nvidia GPUs are the industry standard for accelerating data center tasks such as artificial intelligence (AI). Compared to the previous Hopper architecture, Blackwell GPUs can process AI training tasks up to 4x faster and AI inference tasks up to 30x faster. O’Malley estimates that Blackwell GPUs will add $15 billion to revenue this quarter, and believes that number could more than double in the next quarter.
Barclays isn’t the only Wall Street firm to raise its outlook. According to LSEG data, the average forecast for Nvidia’s revenue for the fourth quarter of fiscal 2025 (ending in January 2025) has increased by 5% over the past 90 days, and the average forecast for fiscal 2026 has increased by 9% over the same period. did. Many analysts believe the latest upward revision is due to increased confidence in Blackwell.
Beth Kindig, chief technology analyst at I/O Fund, is particularly optimistic. She believes data center revenue will increase by at least 50% in fiscal year 2026, driven by at least $200 billion in sales of Blackwell GPUs. Looking further ahead, Kindig estimates that Nvidia will be worth $10 trillion by 2030. This represents a 200% increase from its current market value of $3.3 trillion.
Additionally, Wedbush’s Dan Ives says that demand for Blackwell GPUs currently exceeds supply by a factor of 15. In other words, Nvidia believes it can only supply one chip for every 15 chips a customer wants to buy. This adds context to recent comments from Nvidia CFO Colette Kress, who said during the third-quarter earnings call that Blackwell’s “demand significantly exceeds supply.”
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Nvidia has an underappreciated opportunity in autonomous driving and robotics
Dan Ives recently told CNBC that the Wall Street consensus underestimates NVIDIA’s earnings growth in the coming years by 30%. He believes part of that shortfall is due to Blackwell GPU revenue, which will exceed expectations in the short term. But Ives also sees an upside to the consensus emerging from robotics solutions in the long run.
The last point is especially important. While the market is currently focused on generative AI, Nvidia CEO Jensen Huang says the next wave of AI will be robotics powered by physical AI. When it comes to context, generative AI can create text, images, and other media content in response to prompts, while physical AI can understand, navigate, and interact with the real world.
Nvidia has had great success monetizing generative AI, and this is reason enough to believe the company will be just as successful with physical AI. Nvidia has a distinct advantage in providing full-stack computing solutions for autonomous robots. The company’s robotics platform consists of the supercomputing chips and networking gear needed to train AI models, as well as the software development tools needed to build industrial manipulation arms, autonomous vehicles, and humanoid robots.
Importantly, NVIDIA’s automotive and robotics sales were just $449 million in the most recent quarter, which pales in comparison to the company’s $30.7 billion in data center sales. But Jensen Huang believes self-driving cars and robotics will eventually become two of the world’s largest computing industries, suggesting strong growth in the coming years.
In fact, Ives estimates that NVIDIA has a $1 trillion opportunity in self-driving cars and robotics, and that by monetizing these opportunities, the company could ultimately generate $5 trillion in revenue. I believe it will reach its market value. His forecast suggests a 52% rise from the current market value of $3.3 trillion. This is definitely great news for Nvidia shareholders.
Trevor Jennewine holds a position at Nvidia. The Motley Fool has a position in and recommends Nvidia. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.
