Investing.com – Nvidia (NASDAQ:NVDA) is “well-positioned” to capture most of the expected growth in the market for specialized artificial intelligence-enhancing hardware in 2025, analysts at Piper Sandler said in a note to clients calling the chipmaker its “top large-cap pick.”
The analysts led by Harsh Kumar predicted the multibillion-dollar total addressable market for these so-called AI accelerators will increase by roughly $70 billion in 2025. These accelerators help power AI in devices like mobile phones and laptops, while also playing a crucial role in cloud computing servers.
Described by some experts as a “moat,” Nvidia’s AI graphics processors, such as its H100 offering, have become crucial components in the push to train and deploy AI models.
Nvidia’s latest AI chip, known as Blackwell, is also seeing strong demand even before it has been launched to the public, the company’s Chief Executive Jensen Huang has noted. The Piper Sandler analysts estimated that Blackwell should be released to the general public in Nvidia’s January quarter, adding it is expected to account for “several billion dollars of revenues.”
“[W]e see [Nvidia] well positioned to capture most of the incremental [total addressable market] increase while ceding only a small bit to its merchant chip competitors,” the analysts said.
They projected that Blackwell sales alone will be at the upper end of the $5 billion to $8 billion range despite lingering concerns over tight supplies. While the soaring demand for AI chips has boosted semiconductor groups like Nvidia, the trend has also left these firms struggling to provide enough chips.
The Piper Sandler analysts said the constraints will likely continue through at least the first half of the 2025 calendar year.
Still, Nvidia’s market cap jumped by 9.3% to $3.26 trillion in October, fueled in part by a robust AI demand outlook from Taiwan Semiconductor Manufacturing Corp — the world’s biggest contract chipmaker. Nvidia, which is due to report its latest quarterly results on Nov. 20, was valued at $3.62 trillion prior to the start of trading on Wall Street on Monday.
