• Nvidia stock still has 50% upside, according to Rosenblatt analyst Hans Mosesmann.

• Mosesmann increased his price target to a street-high $200 per share, citing Nvidia's strong profit potential.

• "The real narrative lies in the software that complements all the hardware goodness," Mosesmann said.

Even after its one-year gain of more than 210%, Nvidia stock still has 50% upside from current levels.

That's according to Rosenblatt semiconductor analyst Hans Mosesmann, who increased his Nvidia price target to a street-high $200 per share on Tuesday.

Mosesmann rates Nvidia at "Buy" and previously had a $140 price target.

The bullish call would get Nvidia to a $5 trillion valuation.

And the chip maker deserves it, according to Mosesmann.

"We see Nvidia's Hopper, Blackwell, and Rubin series driving 'value' market share in one of Silicon Valley's most successful silicon/platform product cycles," Mosesmann said.

But going forward, the real profit story for Nvidia isn't in its hardware-focused GPU business, but rather in its software business, which is spearheaded by Nvidia's popular CUDA platform.

Nvidia's CUDA is used by millions of developers who are building large language models and other programs on top of the company's AI-enabled GPU chips.

"The real narrative lies in the software that complements all the hardware goodness. We anticipate this software aspect will significantly increase in the next decade in terms of overall sales mix, with an upward bias to valuation due to sustainability," Mosesmann said.

If Nvidia can generate a meaningful amount of recurring revenue from software, it would derisk the company by making its revenue more predictable.

Nvidia has historically relied on hardware sales to drive its revenue, which are usually cyclical and go through very volatile "boom and bust" periods.

Right now, Nvidia's hardware business is going through an unprecedented boom period.

But it's Nvidia's software business that could help propel the company's profits to a split-adjusted $5 per share by 2026, according to Mosesmann, which, at a 40x price-to-earnings multiple, generates a $200 price target.

Mosesmann's bullishness on Nvidia's software platform was echoed by I/O Fund Tech analyst Beth Kindig last month.

"The CUDA software platform is what developers learn on. So, similar to iOS is really what locked people into the iPhone because developers were developing applications for the iPhone. The same thing is happening with Nvidia, which is that the CUDA platform is what AI engineers are learning in order to program GPUs, so that helps lock them in, and that combination, right now, I'm calling it an impenetrable moat," Kindig explained.