Nvidia a new top pick at Mizuho

Investing.com -- Mizuho (NYSE:MFG ) has added Nvidia (NASDAQ: NASDAQ:NVDA ) as a new top pick for November, underscoring its strong position in the AI and data center market.

Analysts at Mizuho reiterated an Outperform rating on Nvidia, setting a price target of $140. They highlight Nvidia's commanding position in AI training and inference chips for data centers, where Nvidia is estimated to hold over a 95% market share.

Mizuho projects that the data center market for AI chips is poised to grow at a 74% compound annual growth rate, potentially surpassing $400 billion by 2027.

This growth, Mizuho suggests, will be propelled by Nvidia's advanced products and roadmap, including the H200, GB200, and GB300 chips set to ramp up in 2024 and 2025. They also expect Nvidia's Grace CPU and NVL36/72 servers to drive content growth within AI servers.

Beyond data centers, Mizuho sees continued strength in Nvidia's gaming segment, noting an estimated 75% market share in PC gaming GPUs.

"We believe headwinds from China AI chip restrictions remain muted," adds the firm. "We also see upgrade cycle opportunity for the RTX 50-series as RTX 40-series penetration remains at ~10% of the PC market, as NVDA could see a >$10B/yr Gaming revenue run rate."

Mizuho also points out the advantage Nvidia holds over its main competitors, AMD (NASDAQ:AMD ) and Intel (NASDAQ:INTC ). While AMD is ramping up production of its MI300 and Intel is advancing its Gaudi3, Mizuho expects Nvidia to maintain dominance through the performance boosts provided by its Blackwell architecture, with cost-efficient improvements in average selling prices.

Source: Investing.com