Piper Sandler Says Nvidia Is 'Unmatched' in AI Compute Market
Piper Sandler analyst David O'Connor is urging investors to buy Nvidia NVDA, citing its dominance in AI compute and relatively low valuation. The analyst initiated coverage with a Buy rating and a $300 price target for Nvidia shares.
O'Connor estimates that Nvidia controls around 80% of the AI-compute market and 50% of unit shipments, giving it significant scale as demand for compute expands.
The analyst believes that Nvidia's lead in AI compute is due to its ability to release next-generation products faster than its rivals. The company's Vera Rubin rollout appears to be on schedule and could account for around 20% of fiscal third-quarter 2027 data-center revenue, while Grace Blackwell systems are expected to supply the remainder.
O'Connor also notes that Agentic AI drives demand for computing capacity, particularly in autonomous systems, and expects shortages to continue for another two to three years. This is likely to support pricing and limit competition from other accelerators.