AI-related Revenue Could Reach $300 Billion by 2027
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On July 25th, it was reported that Nvidia's stock price has doubled this year amid the artificial intelligence (AI) boom, with even more room for growth. Mizuho analyst Vijay Rakesh stated in a Sunday report to clients that Nvidia's stock has a potential 20% upside, raising the target price to $530—a 32.5% increase from the previous $400. He described this target as "conservative."
Rakesh believes Nvidia's dominant position in the AI chip sector could last until at least 2027. He projects that by then, the company could generate $300 billion (approximately 2.16 trillion RMB) in AI-related revenue, capturing 75% of the AI server market. This is ten times higher than his forecast for this year's AI revenue, which he estimates at $25–30 billion.
"With the accelerating demand for generative AI, we see significant opportunities for hardware providers offering higher computational power for large language models, particularly Nvidia, a leader in the AI field," Rakesh wrote.
Nvidia reported impressive growth driven by generative AI in its Q1 earnings released in May, with revenue reaching $7.2 billion, surpassing Wall Street expectations. However, the company did not disclose specific AI-related revenue figures.
The surge in Nvidia's stock has also significantly increased the wealth of CEO Jensen Huang. According to the Bloomberg Billionaires Index, he is now the 32nd richest person globally, with a net worth of $40 billion—a 189% increase this year. Huang owns 86.9 million Nvidia shares, representing a 3.5% stake in the company.
Rakesh isn't the only analyst bullish on Nvidia. In June, Morgan Stanley also named Nvidia its "top pick," citing strong demand for its AI chips.