Evercore ISI analysts started research coverage on Nvidia (NASDAQ: NASDAQ:) at Outperform and a price target of $1,160, saying they see the chipmaker as “an ecosystem play, not a semiconductor company.”

They argue that computing progresses through distinct eras, occurring roughly every 15-20 years, which they refer to as "tectonic shifts in computing." 

Historically, these shifts are often dominated by a single company that manages to integrate all components of the computing experience—examples include (NYSE:) with mainframes, DEC with minicomputers, Nokia (HE:) with feature phones, and Apple (NASDAQ:) with smartphones. 

They note that the PC era was unique in being more fragmented, with different companies specializing in either chips, hardware, or software, a model that many investors mistakenly apply when assessing Nvidia.

The analysts believe that in each of these eras, the dominant company typically captures about 80% of the market's value, leaving the remainder for competitors. In that context, NVDA is poised to be a dominant force in the current era. 

Moreover, they project that investments in such a dominant player can yield exceptionally high returns, often ranging from 100 to 1,000 times the initial investment. 

These high returns are not always fully realized “until well after the next computing era has started,” analysts led by Mark Lipacis said. 

“We believe that the Tectonic Shift to the current Parallel Processing / IoT Computing Era started 5-to-8 years ago, and that NVDA is the dominant ecosystem play in parallel processing, which is only in the beginning phases of generating outsized returns for its investors,” they wrote.