Nvidia (NASDAQ:NVDA), AMD (NASDAQ:AMD) and Broadcom may have greater revenue upside than expected amid the recent flurry of artificial intelligence-linked deals for the trio, investment firm J.P. Morgan said.
“Simply put, though out-year Street numbers for AVGO, NVDA and AMD have moved sharply higher over the past couple of weeks, there is still understandably some conservatism being baked into estimates given concerns around infrastructure funding, competitive dynamics and execution,” J.P. Morgan analyst Harlan Sur wrote in a note to clients.
“From a data center capex standpoint, we still see ample room for upside to spending in coming years, supporting a 40-50% CAGR for the AI accelerator [total addressable market], and a growing AI ‘pie’ that ultimately supports growth for both GPU and XPU (we do expect XPU’s slice of the pie to grow over time). Based on where [Wall] Street numbers have landed though, we anticipate a period of sustained positive revisions to AI revenue estimates as visibility improves and additional capacity deals are announced, which in turn we think will help to drive upward momentum for the stocks.”
Nvidia
Delving deeper, Sur said that analyst estimates are likely undershooting the growth in gigawatts of electricity deployed through 2027. And with Nvidia’s management repeatedly stating that there is between $35B and $40B of revenue for every gigawatt of AI data center capacity, Nvidia is still likely to keep growing the top-line at a strong rate.
“By our math, this does not quite represent its revenue opportunity with current platforms (i.e., Blackwell + Blackwell Ultra), but does begin to align with revenue potential for future platforms,” Sur wrote.
With the upcoming Rubin platform, Nvidia’s revenue could approach $30B per gigawatt and then go into the mid $30B per gigawatt range for Rubin Ultra, Sur posited. “Importantly, on a per-die basis, NVDA’s revenue opportunity increases nearly 3x for [Rubin Ultra] ($70-80k/die) relative to [Blackwell] (~$26k/die), which will be the key driver of growth in revenue per GW in the coming years (as opposed to GPU/die unit volumes).”
AMD
AMD reaching the $20B per gigawatt range for its Helios platform and $25B or more for subsequent platforms are “well within reach,” Sur explained. AMD’s management characterized the recent deal with OpenAI (OPENAI) as “significant double-digit billions of dollars” per gigawatt, which Sur said suggests at least $15B per gigawatt. And even though AMD has historically priced its offerings cheaper than Nvidia and there is less in-house networking content than Nvidia, $20B per gigawatt for Helios seems reasonable, Sur explained.
“Specifically on revenue from the [OpenAI] deal, as much as we do acknowledge that [OpenAI] is technically committing to only the first gigawatt of compute, we frankly see little risk to the announced 6 GW of capacity being deployed over the 4-year timeframe outlined in the agreement,” Sur wrote. “On a run-rate basis, this implies $30-35B of annual revenue for AMD just from its deal with [OpenAI], while Street is forecasting a total of [roughly $31B of data center] GPU revenue for AMD in 2027 — in other words, there is still headroom here for estimates to move materially higher.”
Broadcom
Sur explained it’s “not a stretch” to see Broadcom generate $100B or more in AI revenue in 2027, buoyed by the recent deal with OpenAI.
Assuming Broadcom’s XPUs provide roughly 30% better economics than Nvidia’s GPUs, that would imply revenue at roughly $27B per gigawatt, compared to $35B for Nvidia. Add in a networking attach rate of roughly 30% (similar to what Broadcom has done for its AI XPU business), that gets to roughly $28B per gigawatt.
And if all 10 gigawatts are deployed in roughly three years, that could mean revenue associated with the OpenAI deal between $70B and $90B for 2027 to 2029, compared to Wall Street’s estimates for roughly $60B in 2027.
“Layering in just GOOG/TPU revenue in CY27 (which we estimate will be north of $20B) alongside [OpenAI] revenue takes total AI revenue to within striking distance of $100B in CY27 (from ~$21B in CY25), or 50-70% above Street consensus,” Sur wrote.