Loop Capital lifts Nvidia target to street high of $250 on AI chip spending

Published 25/06/2025, 13:54
© Reuters

Investing.com -- Loop Capital raised its price target on NVIDIA Corporation (NASDAQ:NVDA) to $250 from $175, saying capital spending on chips that power generative AI systems is growing far faster than investors expect.

Analyst John Donovan said checks with cloud-service providers and other large technology buyers point to a surge in demand for graphics-processing units or GPUs and custom AI accelerators.

The firm estimates that spending on non-central-processing-unit compute, largely GPUs, could climb to about $2 trillion in 2028, or roughly 50% to 60% of total installed compute capacity, compared with about 15% today.

“The math just works,” Donovan wrote, adding that the projected investment could support a $6 trillion market value for Nvidia if the company meets the brokerage’s earnings forecast.

Nvidia shares were up about 1.2% at $149.30 in premarket trading.

Loop Capital said the ramp-up of Nvidia’s new Blackwell-generation chips, coupled with widening adoption of AI “factory” data centres by governments, start-ups and mid-size cloud providers, positions the chipmaker for another leg of demand after rapid growth in 2023 and 2024.

The firm now expects Nvidia to ship 6.5 million GPUs in calendar 2025 and 7.5 million in 2026 at average selling prices above $40,000 each.

It also sees an expanding market for AI inference, the running of machine-learning models – as reasoning-oriented software agents move into production.

Donovan cautioned that the new target assumes Nvidia continues to trade around 30 times forward earnings, in line with other large U.S. technology companies.

A lower multiple would imply that “price-earnings compression” could offset some of the forecast growth, he said.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.