BofA: Nvidia
> Investors are overestimating High Bandwidth Memory (HBM) cost pressures and underestimating NVIDIA's massive pricing power and supply-chain scale (backed by $119 billion in prepurchase commitments).> While HBM content per rack might increase by ~$0.2–0.3 million moving from Blackwell to Vera Rubin, total rack pricing is expected to rise by $2–3 million (escalating from ~$3–4 million to $6–7 million).> Gross margins are expected to safely remain in the mid-70% range.> Hyperscaler custom chips (like Google TPU, Amazon Trainium, Meta MTIA) have existed for years, yet NVDA's GPU revenues have skyrocketed ~700x since 2015.> NVDA sales to hyperscalers grew 115% Year-over-Year (YoY)—nearly double the overall cloud capex growth. Over the long term, BofA expects NVIDIA to sustain a dominant 65-70%+ share of AI capex.> While ecosystem investments (~$65 billion) have raised some minor warning flags, BofA estimates these consume less than 35% of its Free Cash Flow (FCF). This leaves substantial capacity for further stock buybacks and dividends.> The AI data center systems Total Addressable Market (TAM) is expected to rocket to ~$1.7 Trillion by CY30 (up from $273 billion in CY25), representing a 44% CAGR.$NVIDIA(NVDA.US) $Alphabet(GOOGL.US) $Amazon(AMZN.US) $AMD(AMD.US) $Broadcom(AVGO.US) $Marvell Tech(MRVL.US) $Micron Tech(MU.US)
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