It’s safe to say NVIDIA (NASDAQ:NVDA) not only benefited from the rise of AI: it defined it. Its chips have become the backbone of modern artificial intelligence, selling at record rates and powering the world’s most advanced systems. But lately, with all the hype around AI and copious gains in the stock markets, some investors have started to wonder if we’re now in AI bubble territory.
Elevate your investment strategy:
- Enjoy TipRanks Premium at 50% off! Benefit from powerful investing tools, advanced data, and insights from expert analysts to help you invest with confidence.
Cantor’s CJ Muse strongly disagrees. The top 1% analyst says we’re still in the “early stages of a multi-trillion dollar AI infrastructure build,” where hyperscalers alone provide visibility into hundreds of billions of requests over the next few years. Beyond that, he points to accelerating adoption in Neo-Clouds, enterprise customers, and emerging physical AI applications as evidence that this cycle has much more room to run.
“So this is not a bubble and we are in the early stages of this investment cycle,” said the 5-star analyst.
Muse’s conviction was further strengthened after recent investor meetings with Nvidia’s top executives, including CEO Jensen Huang and CFO Colette Kress. Among the key takeaways was the company’s new partnership with OpenAI, designed to position the ChatGPT creator as a self-hosted hyperscaler. The strategy aims to remove “margin stacking” from server ODMs and CSPs, thereby reducing the cost gap between Nvidia and ASICs to around 15% – a move that Muse calls a “win-win for both” and which could intensify pressure on the ASIC market.
Nvidia is also continuing its Extreme Co-Design approach on an “annual cadence,” optimizing the entire end-to-end AI infrastructure. Customers, Muse notes, are no longer just buying chips: They’re buying the ability to deploy AI at scale, made possible by Nvidia’s comprehensive full-stack platform, including CUDA-X. “Simply put,” the analyst adds, “Jensen and the team are more focused and competitive than ever, and they are playing to win (per Jensen, “Getting S*** Done”), and we don’t see a scenario where NVDA doesn’t secure at least 75% of the AI accelerator market over time.
After three days of meetings, Muse’s confidence in Nvidia’s dominance and long-term expansion of AI infrastructure “has increased significantly.” The analyst now forecasts $8 in EPS by 2026 (vs. $6.26 for the Street) and $11 by 2027 (vs. $7.36 consensus). “Against a backdrop of consensus for the year potentially still 50% too low, NVDA remains our top pick and continues to offer the most upside potential,” Muse summarized.
As a result, Muse rates NVDA stock an Overweight (i.e. Buy), while raising his price target to a new high of $300 (from $240), suggesting the stock will gain around 64% in the coming months. (To see Muse’s track record, click here)
The Street’s average price target is a more modest $219.86, a figure that suggests the stock will appreciate 20% year-over-year. Rating-wise, the stock boasts a Strong Buy consensus view, based on a mix of 35 Buys, 2 Holds and 1 Sell. (See NVDA Stock Forecast)
To find great ideas for trading stocks at attractive valuations, visit TipRanks. Best Stocks to Buy, a tool that unites all of TipRanks’ stock insights.
Disclaimer: The opinions expressed in this article are solely those of the analyst featured. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
Disclaimer & DisclosureReport a Problem
