Analyst: Wall Street Is Undervaluing Nvidia’s Data-Center Future
On a volatile jobs day, Nvidia managed to claw back gains late Thursday, avoiding a sixth straight loss. Still, the stock remains 7% below its peak earlier this month.
Beth Kindig, tech analyst and CEO of the I/O Fund, argues that Wall Street is misreading Nvidia’s prospects. While its second-quarter results underwhelmed, she points to surging networking revenue as a powerful signal of what’s ahead.
“That’s the differentiator between the current GPUs and the next generation—how much networking those systems require,” Kindig told the Wealthion podcast.
Investors, she says, are overly focused on China. Even if sales there resume, the Blackwell generation of chips is expected to drive far larger numbers: roughly $100 billion annually, compared with about $15 billion from China.
Kindig contends Nvidia is no longer just a chipmaker—it’s evolving into a “rack-scale” company, integrating hardware, networking, and software into unified AI systems. “Think of it like Apple’s dominance with the iPhone, iOS, and the App Store,” she explains.
She believes Wall Street’s estimates for Nvidia’s data-center revenue are far too low. Analysts expect $293 billion by fiscal 2028, while she projects $500 billion annually by then, with quarterly revenue potentially hitting $75 billion as early as late 2025.
“If that happens, depending on your entry point, the stock could have 100% upside—or more,” she says.
Demand, she emphasizes, is insatiable. Big tech players are locked in an arms race for AI dominance, and if their spending slows, large enterprises waiting on the sidelines could fill the gap. Future chip launches, such as Rubin, are likely to fuel another wave of upgrades.
Her one caution: energy consumption. Next-generation systems could require three to five times more power, creating a possible bottleneck.
As for talk of an AI bubble, Kindig believes Nvidia and its suppliers remain well-positioned as “picks and shovels” of the AI boom, though she warns software companies could face more risk.
