This could be a 'radically bullish' sign for Nvidia, AMD and other chip stocks

By Britney Nguyen

Big Tech earnings results show demand for AI compute is outstripping supply, and the willingness to spend bodes well for Nvidia, AMD and Broadcom, a Cantor analyst says

Nvidia CEO Jensen Huang sees AI infrastructure spending reaching between $3 trillion and $4 trillion by 2030.

Chip makers got a boost of confidence last week after a slew of earnings reports from Big Tech companies showed no signs of a slowdown in spending on artificial intelligence. With demand for AI computing expected to continue outstripping supply, one analyst is doubling down on his bullish view of major chip players.

Despite investors' concerns over circular financing following multibillion-dollar infrastructure deals and investments between AI startup OpenAI with Nvidia Corp. (NVDA), Advanced Micro Devices Inc. (AMD) and Broadcom Inc. (AVGO), Cantor Fitzgerald's CJ Muse said the latest earnings season reflected that "there is a clear appetite to spend."

Microsoft Corp. (MSFT), Alphabet Inc.'s Google (GOOGL) (GOOG), Amazon.com Inc. (AMZN) and Meta Platforms Inc. (META) all raised capital-expenditures guides during earnings reports last week, citing growing demands for compute capacity.

See more: Is Big Tech's soaring AI spending creating a bubble? Here's what it means for stocks.

Nvidia Chief Executive Jensen Huang has said that he sees AI infrastructure spending reaching $3 trillion to $4 trillion by the end of the decade, and "anything close to 'Jensen Math' is [a] radically bullish view for" Nvidia, AMD and Broadcom, Muse said in a Monday note. Nvidia and AMD both design graphics processing units, while Broadcom designs application-specific integrated circuits, or ASICs, that are customized for different tasks.

At the low end of that range, Muse said his team modeled earnings power for Nvidia reaching $35, AMD reaching $20 and Broadcom reaching $42 by 2030.

"So, if Jensen is even half right about his vision into 2030, there is still clearly plenty of upside for these AI-enablers, as the journey has only just begun," Muse said.

Read: Why Nvidia's $100 billion investment in OpenAI signals a major transformation

Altogether, OpenAI has announced that it has agreed to 26 gigawatts of compute with Nvidia, AMD and Broadcom - about $700 billion in AI-chip revenue if all of the projects are completed, Muse said. That estimate doesn't include the cooling, storage, power and other components of a data center, he added.

The $3 trillion to $4 trillion in AI infrastructure translates to about 60 to 80 gigawatts of AI compute being deployed across the industry, Muse said, and with Huang's math of each gigawatt coming out to about $50 billion each, "this will clearly require more unique financing from OpenAI and others," which he said would likely lead to continued worries over circular financing.

The Cantor team also said memory, storage and semiconductor-capital-equipment players would benefit from the increasing AI spending.

Meanwhile, Rosenblatt's Kevin Cassidy said in a Monday note that he expects a "slight beat-n-raise" for Nvidia when it reports earnings later this month, "with upside to revenue limited by supply."

Cassidy's team raised its revenue estimates for Nvidia in 2026 by about $50 billion, based on Huang's announcement - made at Nvidia's GPU Technology Conference in Washington, D.C. last week - that the company is looking at $500 billion in orders for its Blackwell AI platform from now through next year, with some capacity already shipped.

"Almost more importantly, we continue to be impressed by Nvidia's AI platform rapidly expanding into other markets beyond the hyperscale data centers," Cassidy said, noting a spate of announced partnerships including one focused on 6G with Nokia Corp. (FI:NOKIA).

See more: Nvidia moves closer to a $5 trillion valuation. Here's what's driving its momentum.

Cassidy raised his 12-month price target for Nvidia's stock to $240, representing about 18.5% in upside from Friday's closing price of $202.49.

"We continue recommending [Nvidia] for its clear leadership in delivering AI to all industries," Cassidy said, adding that Rosenblatt is expecting more details from Nvidia on its Blackwell backlog and chip roadmap.

-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.

(END) Dow Jones Newswires

11-03-25 0943ET