The AI trend is still surging! JP Morgan: Revenue potential of NVIDIA Corporation (NVDA.US), AMD (AMD.US), and Broadcom Inc. (AVGO.US) is underestimated.

J.P. Morgan said that due to the recent surge in AI-related transactions, NVIDIA Corporation, AMD, and Broadcom Inc. may have greater revenue potential than the market expects. J.P. Morgan analyst Harlan Sur said in a client report, "In short, while the market has significantly raised its long-term profit expectations for NVIDIA Corporation, AMD, and Broadcom Inc. over the past few weeks, analysts have retained a certain level of conservatism in their forecasts due to concerns surrounding infrastructure financing, competition dynamics, and execution." The analyst added, "From the perspective of data center capital expenditures, we believe there is still ample room for growth in the next few years, which will support a compound annual growth rate (CAGR) of 40%-50% for the AI accelerator market, as well as the expanding AI 'cake', ultimately driving the growth of the GPU and XPU market together (we expect the share of XPU in the overall market to gradually rise). Based on the current market consensus level, we expect that as visibility improves and more capacity agreements are announced, AI-related revenue expectations will see a sustained upward trend, driving further upside for these stocks." NVIDIA Corporation In further analysis, Harlan Sur pointed out that the market may be underestimating the scale of power growth in AI data center deployments by 2027. NVIDIA Corporation management has stated multiple times that each 1 gigawatt (GW) of AI data center capacity can generate $35-40 billion in revenue, so NVIDIA Corporation's revenue is still expected to maintain strong growth. Harlan Sur said, "According to our estimates, the current platform (Blackwell + Blackwell Ultra) has not fully reflected this revenue potential, but future platforms will be closer to this level." He predicted that with the upcoming Rubin platform, NVIDIA Corporation's revenue per gigawatt could approach $30 billion, while Rubin Ultra platform revenue per gigawatt could reach the mid-$30 billion range. He added, "More importantly, on a per-die basis, NVIDIA Corporation's revenue potential on the Rubin Ultra platform is nearly three times that of the Blackwell platform (Rubin Ultra is around $70-80,000 per die, while Blackwell is approximately $26,000), which will be a key driver of NVIDIA Corporation's revenue growth per gigawatt in the coming years (rather than GPU chip shipment growth)." AMD Harlan Sur said that AMD achieving $20 billion in revenue per gigawatt on its Helios platform and subsequently reaching a target of $25 billion or higher in revenue per gigawatt on its follow-up platforms "can be fully realized." AMD management previously stated that the latest deal with OpenAI would generate revenue in the "tens of billions of dollars per gigawatt." Harlan Sur pointed out that this implies at least around $15 billion per gigawatt. Although AMD has traditionally priced lower than NVIDIA Corporation and has less proprietary content in network components, he believes that a revenue per gigawatt level of $20 billion on the Helios platform is still reasonable. He said, "Regarding the deal with OpenAI, strictly speaking, OpenAI currently only commits to the first 1 gigawatt of computational power, but we believe there is very little risk in deploying the entire 6 gigawatts of capacity within the four-year period set by the agreement." "On an annualized basis, this deal alone means that AMD will generate approximately $30-35 billion in revenue per year, while the current market estimates AMD's total data center GPU revenue in 2027 is only around $31 billion. In other words, there is still significant upside potential in analyst expectations." Broadcom Inc. Harlan Sur pointed out that achieving over $100 billion in AI-related revenue by 2027 after the recent cooperation with OpenAI is not a pipedream for Broadcom Inc. Assuming that Broadcom Inc.'s XPU is economically priced around 30% higher than NVIDIA Corporation's GPU, this means its revenue per gigawatt is around $27 billion, while NVIDIA Corporation's is $35 billion. Taking into account an additional 30% attachment rate in network businesses (similar to Broadcom Inc.'s existing AI XPU business), total revenue per gigawatt will reach around $28 billion. If all 10 gigawatts of capacity are deployed in the next three years, the OpenAI-related transactions could bring Broadcom Inc. $70-90 billion in revenue from 2027 to 2029, while Wall Street's current estimate for Broadcom Inc.'s 2027 AI revenue is only around $60 billion. Harlan Sur said, "In addition, we expect that Alphabet Inc. Class CTPU business will bring Broadcom Inc. over $20 billion in revenue in 2027, and with the additional income from OpenAI, Broadcom Inc.'s total AI revenue in 2027 will be close to $100 billion (compared to around $21 billion in 2025), which is 50%-70% higher than market consensus."