NVIDIA’s (NVDA) AI GPU Market to Keep Expanding Beyond Hyperscalers

NVIDIA Corporation (NASDAQ:NVDA) is one of the AI Stocks Analysts Are Watching Closely. On October 15, HSBC analyst Frank Lee upgraded the stock to Buy from Hold and raised his target price to $320 per share from $200.

The firm believes that the AI GPU total addressable market will keep expanding beyond hyperscalers, driving continuous earnings growth.

Lee cited a potential increase in the total addressable market for GPUs for the fiscal year 2027, following Nvidia’s deals with OpenAI and Stargate. The analyst revised his data center estimates to $351 billion, which is 36% higher than consensus estimates. Lee believes that a recovery in China could also provide a tailwind.

“We also see potential easing of China GPU uncertainties following the potential US-China trade deal that could enable NVIDIA to see a demand recovery in the Chinese market,” the analyst wrote. “With c78% upside, we upgrade our rating to Buy as we expect AI GPU TAM to keep increasing beyond hyperscalers, leading to continuous earnings growth.”

Analysts at the firm raised Nvidia’s fiscal 2027 estimate for Chip on Wafer on Substrate, or CoWoS, allocation to 700K (from 480K). This marks the first significant rebound in CoWoS wafer allocation momentum since the fourth quarter of 2025.

They noted that Nvidia’s aggressive fiscal 2027 estimate for CoWoS wafer forecasts at TSM will trigger an upward revision in fiscal 2027 datacenter revenues and reinforce their view of a rapidly expanding AI GPU market.

NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services.

While we acknowledge the potential of NVDA as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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