Investing.com -- Loop Capital reiterated a Buy rating and a price target of $175 on Nvidia (NASDAQ:NVDA) shares, citing expectations of substantial upside to consensus estimates for 2025 and 2026.
The firm believes Wall Street continues to underestimate the conviction of hyperscalers in their investments in generative AI and accelerated compute infrastructure.
"Big picture, we believe that 2-3 year Street numbers remain low as our work with both customers and the NVDA build ecosystem points we can see NVDA GPU reaching 10M – 12M," Ananda Baruah, a managing director at Loop Capital said in a note.
Hyperscalers plan to increase their share of non-CPU compute to over 50% in the coming years, Baruah highlighted, compared to around 10% currently.
Near-term challenges persist, particularly related to GB200 rack testing and validation issues, which have impacted volumes and continued into January. However, Loop Capital noted recent progress in addressing these obstacles, with increased shipments of HGX B200 systems expected to help satisfy market demand.
Looking ahead, the firm anticipates a meaningful ramp in GB200 production starting in May, with run-rate volume expected by the October quarter.
Baruah also pointed out Nvidia’s decision to move away from dictating system configurations and offer more design freedom to its partners.
“NVDA would like to give even more design freedom back to partners with GB200 next 6 months, and would love to pull the GB3000 into mid-summer, if technical qualification is possible,” the analyst said.
Overall, Loop Capital sees a compelling long-term outlook for Nvidia, as the chip giant stands to benefit from two trillion-dollar market opportunities in accelerated compute and generative AI.
"For NVDA, the story is Accelerated Compute + Gen AI," the report emphasized, suggesting these trends are only at the beginning of a significant growth phase.