Loop Capital started covering Nvidia (NASDAQ:NVDA) stock, assigning a Buy rating and a price target of $1,200, the highest among current Wall Street predictions.

Loop Capital expressed confidence in Nvidia, citing significant potential for the company to outperform current market estimates in the 2024/2025 and 2025/2026 fiscal years. The analysts highlighted the beginning of what they see as a 3 to 5-year period of substantial growth in GPU computing and foundational developments for General AI across Hyperscale environments.

Despite the emergence of new silicon competitors, including startups and established companies like AMD and INTC, and the anticipation of Hyperscale operators developing their own silicon solutions, Nvidia is expected to remain a critical supplier.

Loop Capital’s analysis suggests a significant shift among Hyperscalers towards adopting GPU computing for 50% to 60% of their needs, a considerable increase from the current 10%. This transition is largely driven by generative AI, reinforcing Nvidia CEO Jensen Huang’s early predictions about the shift towards GPU computing to cater to advanced AI applications.

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