On Thursday, Mizuho Securities updated its outlook on NVIDIA Corporation (NASDAQ:NVDA), increasing the shares price target to $1,000 from the previous $850, while maintaining a "Buy" rating on the stock. The firm's optimism is rooted in NVIDIA's strong positioning in the artificial intelligence (AI) sector, which is expected to continue its rapid expansion through 2024 and 2025.
The report highlighted NVIDIA's potential revenue growth in the data center (DC) segment, with projections reaching approximately $89 billion in 2024. This growth trajectory could see a further surge, with AI data center revenues estimated to hit around $280 billion by 2027. NVIDIA's product lineup, including GH200, B100, and B200, is anticipated to be a significant contributor to this growth.
Mizuho also noted the performance of NVIDIA's competitors in the AI space. Advanced Micro Devices, Inc. (NASDAQ:AMD) is seen as the second-largest player in the AI GPU market, albeit still trailing NVIDIA. AMD's AI revenue for 2024 is projected to potentially increase to between $4 and $5 billion, compared to current estimates of $3.5 billion, with the possibility of climbing to approximately $18 billion by 2027.
Broadcom Inc. (NASDAQ:AVGO) is another company expected to benefit from the AI market expansion. Mizuho forecasts Broadcom's AI revenues to grow from an estimated $8 billion in 2024 to as much as $20 billion by 2027. This growth is attributed to Broadcom's strategy of ramping up custom silicon solutions for customers, positioning it favorably in what is described as the new AI arms race.
Overall, Mizuho's assessment underscores the significant growth prospects for companies heavily invested in AI technology, with NVIDIA leading the charge. The semiconductor industry appears poised for continued growth as these tech giants expand their AI capabilities and product offerings in the coming years.
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