Analysts Project Massive Upside for Nvidia and Microsoft Amid AI Expansion

Two members of the 'Magnificent Seven' are seeing exceptionally bullish price targets from Wall Street analysts, with projections suggesting potential gains of nearly 100%. The optimism centers on the continued scaling of artificial intelligence (AI) infrastructure and software integration, specifically focusing on Nvidia's hardware leadership and Microsoft's cloud acceleration. Ben Reitzes of Melius Research has set a $380 price target for Nvidia, implying a 107% upside and a potential market capitalization exceeding $9.2 trillion. This valuation is supported by the anticipated sales of Blackwell and Vera Rubin GPUs, which CEO Jensen Huang expects to generate a baseline of $1 trillion in sales through 2027. Reitzes specifically highlighted advances in inference and agentic AI as primary catalysts for this growth. Similarly, Adam Shepherd of Arete Research maintains a street-high target of $730 for Microsoft, representing a 96% increase. This outlook is fueled by the integration of generative AI and large language models into Azure, the world's second-largest cloud infrastructure platform, which has reaccelerated constant-currency sales growth to nearly 40%. Despite the bullish forecasts, some risks persist. Analysts note the possibility of an AI bubble and the trend of major customers developing internal GPUs for their data centers. While these internal alternatives may be inferior to Nvidia's current offerings, they could potentially reduce the GPU scarcity that has historically bolstered Nvidia's pricing power and gross margins.