Nvidia stock is poised for continued growth over the next 12-18 months, according to Andrew Chang, technology director at S&P Global Ratings. The bullish outlook comes after Nvidia CEO Jensen Huang’s recent comments at a Goldman Sachs conference in San Francisco sparked a sharp rally in NVDA shares this week.
Chang’s optimistic forecast centers on strong demand for Nvidia’s next-generation Blackwell GPU and the company’s dominant position in the AI chip market. “It just confirms our view that we have strong runway for at least the next 12 months,” Chang told Schwab Network on Friday. The analyst pointed to Huang’s guidance on consumer demand as validation of continued upside potential.
Oracle’s recent performance provides additional bullish signals for Nvidia’s future. The software company, which maintains an ongoing partnership with Nvidia, exceeded first-quarter earnings expectations and subsequently raised its revenue forecasts. More significantly, Oracle doubled its planned capital expenditures for the fiscal year—a clear indicator of robust demand for AI infrastructure and Nvidia’s chips.
“All of these are great data points that, at least for the next 12 to 18 months, things look great,” Chang said of the Jensen Huang-led firm. Wall Street analysts share this optimism, with an average price target of $153 per share—representing a 29% upside from current levels, according to Nasdaq data.
However, Chang acknowledged several headwinds that could impact Nvidia’s trajectory. The stock’s extraordinary 2,514% gain over the past five years has raised sustainability concerns among some investors. A more pressing worry involves Nvidia’s largest customers potentially becoming competitors. Apple and Microsoft, two major buyers of Nvidia GPUs, are reportedly developing their own AI chips, which could reduce future demand.
“Ultimately, if Oracle, if Microsoft, if Amazon don’t see the ROI that they expect, they’re going to cut orders,” Chang warned. He noted that hyperscale demand volatility remains a significant concern, as data center players have historically ordered in bulk before pausing for several quarters.
Regulatory scrutiny presents another challenge. The Department of Justice recently launched an antitrust probe targeting Nvidia, according to Bloomberg. Chang suggested it’s only a “matter of time” before other countries implement similar AI regulations.
Despite a post-earnings selloff in late August, Nvidia stock rallied this week alongside tech peers including Oracle and Super Micro Computer, demonstrating continued investor confidence in the AI chip leader’s growth prospects.
Key Quotes
It just confirms our view that we have strong runway for at least the next 12 months
Andrew Chang, technology director at S&P Global Ratings, made this statement following Jensen Huang’s comments at the Goldman Sachs conference. This quote encapsulates the bullish sentiment driving Nvidia’s stock rally and validates investor confidence in sustained AI chip demand.
All of these are great data points that, at least for the next 12 to 18 months, things look great
Chang referenced Oracle’s increased capital expenditures and strong earnings as evidence supporting Nvidia’s growth trajectory. This statement provides a specific timeframe for investors to expect continued strong performance from the AI chip leader.
Ultimately, if Oracle, if Microsoft, if Amazon don’t see the ROI that they expect, they’re going to cut orders. So hyperscale, demand volatility is something that really concerns us
Chang acknowledged the primary risk facing Nvidia—that its largest customers could reduce orders if AI investments don’t deliver expected returns. This quote highlights the dependency of Nvidia’s growth on continued AI adoption and monetization success by cloud providers.
Our Take
Nvidia’s position represents both the promise and precariousness of the AI infrastructure boom. While the 12-18 month runway appears solid based on current demand signals, the fundamental question remains whether AI applications will generate sufficient ROI to justify the massive capital expenditures flowing into GPU purchases.
The customer-to-competitor threat is particularly intriguing. Apple and Microsoft developing proprietary chips mirrors historical tech industry patterns where dominant players eventually vertically integrate. However, Nvidia’s software ecosystem (CUDA) and continuous innovation cycle create significant switching costs that may protect its moat longer than bears anticipate.
The regulatory dimension adds complexity. While antitrust scrutiny could constrain Nvidia’s business practices, it also validates the company’s market dominance and strategic importance. Ironically, regulatory pressure might accelerate customers’ in-house chip development efforts, creating the very competition regulators seek to foster. The next 12-18 months will reveal whether Nvidia’s current dominance represents a sustainable competitive advantage or a peak moment before market fragmentation.
Why This Matters
This analysis is significant for the AI industry as Nvidia remains the dominant force in AI chip manufacturing, powering the infrastructure behind generative AI applications from ChatGPT to enterprise solutions. The company’s performance serves as a bellwether for the entire AI ecosystem’s health and growth trajectory.
The 12-18 month runway prediction suggests the AI boom has staying power beyond short-term hype, validating massive capital investments by cloud providers and enterprises. Oracle’s doubled capital expenditures exemplify how companies are betting billions on AI infrastructure, creating a multiplier effect throughout the technology sector.
However, the emerging threat of customer-turned-competitor dynamics signals a potential industry shift. If tech giants like Apple and Microsoft successfully develop proprietary AI chips, it could reshape the semiconductor landscape and reduce dependency on single suppliers. This vertical integration trend may accelerate innovation but could also fragment the market.
The regulatory attention from the DOJ highlights growing government concern about market concentration in critical AI infrastructure. How regulators approach Nvidia’s dominance will set precedents for AI governance globally, potentially impacting innovation speed and competitive dynamics across the industry.
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