Nvidia (NASDAQ: NVDA) is the center of gravity for the artificial intelligence revolution. The stock has added 15% year to date, outpacing the 8% return in the S&P 500 (SNPINDEX: ^GSPC), and Wall Street analysts still think it’s undervalued. The median target price of $267.50 per share implies 24% upside from the current share price of $213.
Nvidia shareholders recently got some good news from Wall Street. Here are the important details.
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Nvidia continued to dominate the AI accelerator market in 2025
Nvidia graphics processing units (GPUs) are the industry standard in accelerating artificial intelligence (AI) workloads. Nvidia systems consistently outperform alternative infrastructure solutions at the MLPerf benchmarks, objective tests that measure performance across AI training and inference tasks.
For years, Nvidia critics have warned that ASICs (application-specific integrated circuits) are a big threat to the company’s dominance in AI accelerators. Indeed, several customers have designed and deployed ASICs in their data centers, including Alphabet, Amazon, Microsoft, and Meta Platforms. And adoption will almost certainly continue to increase in the years ahead.
However, the idea that custom AI accelerators will materially displace Nvidia GPUs in the near future is absurd. Custom accelerators require custom software development tools that very few companies have the talent and resources to create. And even those with the technical expertise are still at a disadvantage because Nvidia started building its software ecosystem in 2006.
In a recent note, Morgan Stanley analyst Joseph Moore wrote, “We consistently hear that customers see a competitive product as potentially lower cost, put it into use, and come back to Nvidia.” As a result, Nvidia captured 86% market share in AI accelerator sales in 2025, unchanged from its market share in 2024, per Bloomberg.
So what? Despite the enthusiasm surrounding custom silicon companies like Broadcom, ASICs did not event dent Nvidia’s market share last year. Of course, custom AI chips will almost certainly gain share in the years ahead, especially because demand for compute outstrips supply. But Nvidia GPUs will remain the industry standard for the foreseeable future.
AI infrastructure spending continues to outpace Wall Street’s expectations
Wall Street analysts have consistently underestimate how much hyperscalers will invest on AI infrastructure. Initially, the consensus estimate initially said capital expenditures (capex) among the top five hyperscalers (Alphabet, Amazon, Microsoft, Meta, and Oracle) would increase 19% in 2026, but it now says capex will increase more than 60% this year.
