When will Nvidia (NASDAQ:NVDA) Are you running out of breath? The stock has risen more than 11-fold in the last two years. That’s the kind of dynamic that long-time investors would say can’t continue indefinitely.

But anyone who believed that Nvidia was finally facing the day of reckoning at the beginning of the year has already been proven wrong: the stock fell more than 20% below its peak twice in the second half of 2024, only to recover again.

Perhaps even better days lie ahead. That’s why a top Wall Street analyst now thinks investing in Nvidia stock is a “generational opportunity.”

Accelerating AI

If you guessed that this big opportunity for Nvidia was related to artificial intelligence (AI), you’re right. Technically, Bank of America Analysts led by Vivek Arya used the phrase “generational opportunity” to describe what lies ahead for Nvidia in AI accelerators – chips used to accelerate the performance of AI tasks. However, this huge opportunity for Nvidia also represents an equally huge opportunity for investors.

Nvidia’s graphics processing units (GPUs) are the gold standard in accelerating AI applications. The company is unlikely to relinquish its lead any time soon, especially with its super-powerful Blackwell chips on the rise.

In 2023, the AI ​​accelerator market was worth around $45 billion. Arya and the other BofA analysts expect this market to explode to $280 billion by 2027. They assume that it could exceed the $400 billion mark in the following years.

What will be the main driver of this phenomenal growth? Large Language Models (LLMs). Analysts at Bank of America wrote to investors last week: “We continue to see the pace of new model development increase. LLMs in particular are designed for both larger sizes and better thinking skills, both of which require higher training intensity.”

Bigger than Apple?

Unsurprisingly, Bank of America raised its price target on Nvidia. Analysts now expect the GPU maker’s share price to reach $190 within the next 12 months. This corresponds to a market capitalization of around 4.7 trillion US dollars. The currently largest listed company is Apple (NASDAQ:AAPL)which has a market capitalization of around $3.6 trillion.

According to BofA’s predictions, Nvidia could compete head-to-head with Apple on another front. They estimate that Nvidia could generate $272 billion in AI-related revenue by 2030. Apple reported iPhone net sales of $200.6 billion in 2023, down 2% from the previous year.

However, there is no guarantee that Nvidia will be bigger than Apple. Apple has its own potential AI catalyst with the launch of its generative AI functionality, Apple Intelligence. Some analysts believe these new features could trigger an iPhone upgrade supercycle.

The story continues

A cross-generational opportunity to buy Nvidia?

Could Bank of America analysts be wrong about Nvidia? Perhaps. Several things can go wrong for the chipmaker.

For example, generative AI and LLMs may reach their limits. Some AI experts believe that the lack of new training data for AI models could become a serious problem. Although synthetic AI-generated data could provide an answer to this problem, it is uncertain whether this approach will work well.

Nvidia is also facing increasing competition. And not just from chip manufacturers such as Advanced micro devices. Cloud services giants Amazon, Microsoftand Google Parent alphabet also have their own AI chips.

A sharp economic downturn could prevent BofA’s forecasts for Nvidia from coming true as quickly as its analysts expect. Even large customers could cut their spending on AI if they face major financial challenges.

However, I suspect that the likelihood that Bank of America analysts are right about the generational opportunity for Nvidia is greater than the likelihood that they are wrong. If so, it could be a long time before this stock really runs out of steam.

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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Keith Speights has positions at Alphabet, Amazon, Apple, Bank of America and Microsoft. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Apple, Bank of America, Microsoft and Nvidia. The Motley Fool recommends the following options: long $395 January 2026 calls on Microsoft and short $405 January 2026 calls on Microsoft. The Motley Fool has a disclosure policy.

Why a top Wall Street analyst thinks investing in Nvidia stock now is a ‘generational opportunity’ was originally published by The Motley Fool