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There has been a lot of chatter around NVIDIA's peaking margins in recent days, with the bears using this transitory plateau - which itself is a function of the company's ongoing Blackwell production ramp-up - as a cudgel of sorts to declare vindication. Yet, a more nuanced perusal of NVIDIA's market dynamics can only yield one conclusion: the stock's bull case remains intact and pristine. Today, the investment firm William Blair is out with its bullish take on NVIDIA's prospects.
$NVDA William Blair Starts at Outperform
AI Tailwinds in Semis. Broadcom is targeting $12 billion in AI revenue in fiscal 2024, with roughly two-thirds coming from its custom chip business (which co- develops Google’s TPUs and Meta’s MTIA accelerators) and one-third related to…
— Kaushik (@BigBullCap) September 18, 2024
To wit, William Blair believes that NVIDIA has successfully expanded its Total Addressable Market (TAM) from a concentration within the GPU sphere worth just around $100 billion to the broader semiconductor and cloud markets, where the former is worth $800 billion and the latter $1.6 trillion to yield a cumulative TAM of ~$2.4 trillion.
What's more, William Blair now sees NVIDIA's FY 2025 revenue at a whopping $110 billion. To put this figure into context, the company's FY 2023 revenue was just $15 billion!
As a refresher, each GB200 CPU+GPU combo is priced between $60,000 and $70,000, while a single NVIDIA B100 AI accelerator costs between $30,000 and $35,000. What's more, the company is also selling an entire 72-chip AI rack at between $2 million and $3 million.
As an illustration of how robust the demand is for the company's products, Oracle recently announced a "zettascale" supercluster that "can scale up to 131,072 Blackwell GPUs with NVIDIA ConnectX-7 NICs for RoCEv2 or NVIDIA Quantum-2 InfiniBand networking to deliver an astounding 2.4 zettaflops of peak AI compute to the cloud."
Meanwhile, NVIDIA CEO Jensen Huang asserted at the recent Goldman Sachs Communacopia + Technology conference that, given the current semiconductor design limitations, the growing demand for accelerated computing remains the company's "least risky market opportunity." This suggests that the GPU manufacturer already has a viable hedge should the AI-focused demand component disappoint in the years ahead.
NVIDIA shares are down ~1 percent today ahead of the Federal Reserve's interest rate decision. Year to date, the stock is up a whopping 137 percent.
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
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