This Nvidia bull has a bold prediction for the stock - and says 'bubble' talk is misguided

The AI boom is not a bubble, Cantor analysts say, as they see hundreds of billions of dollars in demand still ahead and believe Nvidia's opportunity in the market has more to run Cantor Fitzgerald analysts raised their price target for Nvidia's stock after a meeting with CEO Jensen Huang and other management. Fears of an artificial-intelligence bubble are growing amid multibillion-dollar infrastructure deals between Nvidia Corp. and a small crop of top AI players. But the build-out is only starting, Cantor Fitzgerald analysts said. With hyperscalers expected to spend hundreds of billions more in the coming years, Cantor now sees a runway to a $7 trillion market capitalization for the chip maker, implying the stock could rally more than 50% from current levels. The AI industry is "moving at exponential speed," the analysts said in a Thursday note after meeting with Nvidia (NVDA) management. In addition to the hyperscalers, the Cantor team sees physical AI development, enterprises and neo-cloud companies, which rent out graphics processing units, driving demand for infrastructure over "the next handful of years." "Thus, this is not a bubble, and we are still in the early innings of this investment cycle," the analysts said. See more: Here's what the OpenAI-AMD deal says about Nvidia In Cantor's view, Nvidia's partnership with OpenAI to provide millions of its GPUs to support the AI startup's next-generation models shows that "they are looking to stand them up as its own self-hosted hyperscaler." That way, margin stacking by server original-design manufacturers and cloud-service providers could be avoided, the analysts said. Margin stacking is when profit markups from different parts of the supply chain add up, leading to a higher final price. By removing the margin stacking, the cost gap between Nvidia's chips and custom chips comes "to only an average of 15%," the analysts said. In their view, it's "truly a win-win" for both companies, and potentially puts pressure on the market for application-specific integrated circuits, which poses a growing challenge to Nvidia's dominance. Meanwhile, Nvidia's annual product cadence allows for "the optimization of the entire AI infrastructure," the analysts said, because customers don't only want chips, but also to scale out AI deployment. Nvidia has a full-stack solution of chips, networking and software. "Put simply, Jensen and the team are as focused and competitive as ever, and they are playing to win," the analysts said, referring to Nvidia Chief Executive Jensen Huang. The analysts added that they "do not see a scenario where [Nvidia] does not secure at least 75% of the AI Accelerator market over time." The Cantor team's confidence in the growth of AI infrastructure demand and Nvidia's share of the market until the end of the decade "has increased considerably," they said. Going into 2026, the analysts see $8 per share in earnings power, which is above the Wall Street consensus of $6.26 per share. They see the potential for earnings per share of $11 in 2027, which tops the current $7.36 consensus view. The analysts said that the disparity between their estimate and the Street's forecast keeps Nvidia as their top pick with the most upside. Cantor raised its price target for Nvidia's stock to $300, which is about 55% above current prices. The analyst believes there is more meaningful upside for the stock, as the company continues to propel itself to a "stretch goal" of $50 in EPS going into 2030. At that time, Wall Street expects the total addressable market for AI infrastructure to reach between $3 trillion and $4 trillion. The firm's $300 price target translates to a $7 trillion market cap for Nvidia, which recently became the first company to reach the $4.5 trillion mark. Shares of Nvidia were up 2.1% on Thursday after a Bloomberg report that the company has received approval from the U.S. government to export billions of dollars' worth of its chips to the United Arab Emirates. The Commerce Department's Bureau of Industry reportedly issued the licenses for Nvidia to export the chips after the U.A.E. confirmed plans to invest a similar amount into the U.S. -Britney Nguyen This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

This Nvidia bull has a bold prediction for the stock - and says 'bubble' talk is misguided

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