Nvidia's CEO expects chip sales to double next year. What does this mean for the stock?

Nvidia CEO Jensen Huang said that next year his company will sell twice as many chips as it did this year. A month ago, the strong revenue growth forecast from the de facto monopoly in the AI accelerator market triggered the sharpest jump in its stock price since the spring of 2025.

Nvidia's long-time CEO shared his forecast on September 17 during a meeting with reporters at a summit attended by King Carl III of the United Kingdom in Scotland. “I expect Nvidia to sell twice as many chips next year as it did this year,” CNBC quoted Huang as saying. “The fact is that artificial intelligence brings enormous benefits to a wide variety of industries and economies, and this is evident in nearly every country where we operate: people want to invest in AI.”

The new forecast pertains to the number of chips, the total sales volume of which Nvidia does not disclose, the TV channel notes. The company’s product lineup isn’t limited to AI accelerators for data centers: it also develops its own central processing units, networking chips, and chips for cars, robots, and game consoles.

In August, Nvidia forecast a 70% increase in revenue for the next fiscal year. The company suggested that revenue could double if there were sufficient shipments from partner factories to meet the rapidly growing demand. “It’s incredible, but even at our current scale [of sales], we’re seeing demand grow faster and faster,” said CFO Colette Kress at the time (as quoted by Bloomberg).

The August forecast significantly exceeded analysts’ expectations: according to Bloomberg, they had, on average, anticipated a 45% increase in revenue. During trading on August 27, Nvidia’s stock soared 8.7% to $227.98, and its market capitalization jumped by $442 billion—marking the company’s largest single-day stock gain since April 2025, Bloomberg reported.

However, overall, the stock of the AI sector’s key beneficiary has gained only 4% over the past three months, despite strong financial results, according to Barron’s.

The current consensus among 61 analysts covering Nvidia stock is “Buy,” according to MarketScreener, citing data from S&P Global. The average target price for the stock is $328.49—50% higher than the last closing price on the New York Stock Exchange ($219.34). In after-hours trading on September 18 in the U.S., the stock is up more than 1%, according to Yahoo Finance.

UBS analysts believe Nvidia is undervalued based on their own model for assessing the business and its value, according to Barron’s. Switzerland’s largest bank expects the chipmaker’s cash return on invested capital (CFROI) (a metric that excludes the impact of inflation and adjusts for accounting distortions, including the cost of research and development and off-balance-sheet operating leases) will reach 86%. Currently, only about 30 companies worldwide have this level of business efficiency, the publication notes.

This article was AI-translated and verified by a human editor