Analysts at Bank of America on Thursday reiterated their Buy rating on Nvidia (NASDAQ:NVDA) stock and raised their price target from $165 to $190, suggesting a nearly 40% upside from current levels.
BofA also raised pro forma estimates for 2025 and 2026 earnings per share (EPS) by 13% and 20%, respectively.
The bank believes Nvidia, which has an 80-85% market share, faces a “generational opportunity” in a total addressable market (TAM) of more than $400 billion, a significant jump from this year’s forecast.
Analysts said their bullish stance on the stock has been bolstered by several recent industry developments — TSMC’s recent blowout report, AMD’s AI event and Blackwell’s strong demand, among others — as well as strong competitive positioning of the company.
Additionally, they highlight Nvidia’s undervalued corporate partnerships with majors such as Accenture (NYSE:ACN), ServiceNow (NYSE:NOW), and Oracle (NYSE:ORCL), as well as its software offerings.
“NVDA’s commitments span multiple verticals and offerings such as AI Foundry, AI Hubs, NIMs are key drivers for its AI leadership, not only on the hardware side but also on the systems/ecosystems side,” they note. .
BofA predicts that Nvidia’s free cash flow (FCF) margin of 45-50% remains undervalued, as it is nearly double the average of the so-called “Magnificent Seven” tech giants.
“In dollar terms, NVDA could receive $200 billion-plus FCF over the next two years, competing with AAPL and providing discretionary growth,” the analysts said.
In the “bull case” scenario, BofA suggests that Nvidia could beat expectations if the mix of the networking sector reaches 17-18%, due to the launch of Switch Spectrum and potential market share growth in Ethernet.
This could conceptually lead to sales exceeding $200 billion in fiscal 2026. Additionally, there is scope for gross margins to improve to the mid-70% range, factoring in system mix changes and better returns from the Blackwell product range.
At Bro In Finance, we are committed to helping traders navigate the complexities of the forex market. Our in-depth analysis, expert insights, and advanced tools empower you to make informed decisions and achieve your trading goals. Whether you’re a beginner or an experienced trader, Bro In Finance is your trusted partner in mastering the forex market. Visit our website for more trading tips and strategies to enhance your trading experience.
Check out our on Best Forex Brokers to know more about this topic
Check out the most crucial steps that you need to take when choosing your forex broker
Have you heard about an amazing Broker Platform called “AVATRADE“? We at Bro In Finance do recommend this amazing broker.
Check out here to figure out the best funded trader program: Which Funded Challenge is Best
Reference;
Karaahmetovic, V. (2024) Nvidia facing a ‘generational’ opportunity, stock has nearly 40% upside left: BofA By Investing.com, Investing.com. Investing.com. Available at: https://www.investing.com/news/stock-market-news/nvidia-facing-a-generational-opportunity-stock-has-nearly-40-upside-left-bofa-3670394 (Accessed: 18 October 2024).
