On Thursday, HSBC (LON:HSBA) analyst increased the price target on shares of NVIDIA (NASDAQ:NVDA) to $200 from the previous $145, while maintaining a Buy rating on the stock.
The adjustment comes as NVIDIA's market capitalization nears a staggering $3.6 trillion, marking the highest in the world. HSBC's remarks highlighted NVIDIA's continued growth, particularly noting the potential in the data center sector that he believes is not yet fully reflected in the market price.
According to the analyst, NVIDIA has overcome a previous obstacle in August and has made adjustments to its 2025 AI GPU roadmap. Additionally, concerns regarding the Blackwell supply chain have diminished.
The revised forecasts for NVIDIA's data center sales and earnings per share (EPS) for fiscal year 2026 are 48% and 49% above the consensus estimates, respectively. These projections are supported by increasing capital expenditure momentum from hyperscalers for the year 2025.
In anticipation of NVIDIA's third-quarter fiscal year 2025 results, which will be announced on November 21, HSBC expects sales to reach $35.3 billion. This figure surpasses both the management's guidance and the consensus estimates, which stand at $32.5 billion and $33.1 billion, respectively.
Looking ahead to the fourth quarter of fiscal year 2025 and the first quarter of fiscal year 2026, HSBC's sales forecasts are $38.0 billion and $42.7 billion, respectively, compared to consensus estimates of $36.6 billion and $39.9 billion.
The analyst suggests that while the third-quarter sales are expected to outperform, the extent of this outperformance may not surprise the market as much due to some already optimistic sell-side forecasts. These bullish predictions for the third and fourth quarters of fiscal year 2025 are at $34.5 billion and $44.0 billion, respectively.
In other recent news, NVIDIA has seen a price target increase to $180 by Susquehanna, based on anticipated strong results in the upcoming earnings report. The firm cites the potential impact of NVIDIA's H100/H200 and Blackwell products and continued demand in the data center and artificial intelligence sectors.
In a significant technological advancement, NVIDIA and SoftBank (TYO:9984) Corp have launched the world's first combined artificial intelligence and 5G telecommunications network, known as an artificial intelligence radio access network (AI-RAN). The network has potential applications in various sectors, including autonomous vehicles and robotics control.
In a related development, Amazon (NASDAQ:AMZN) Web Services is offering $110 million in free computing power to researchers to promote the use of its custom AI chip, Trainium, a competitor to NVIDIA's offerings.
In the semiconductor sector, Citi analysts predict a rebound and have given a 'buy' rating to several companies, including NVIDIA. Lastly, Redburn-Atlantic initiated coverage on NVIDIA shares with a 'buy' rating, reflecting a positive outlook on the company's prospects in the field of accelerated computing.
These developments showcase recent activity and analyst sentiment surrounding NVIDIA.
InvestingPro Insights
NVIDIA's impressive market performance aligns with several key metrics and insights from InvestingPro. The company's market capitalization has indeed reached an astounding $3.59 trillion, confirming its position as a market leader. This valuation is supported by NVIDIA's robust financial performance, with revenue growth of 194.69% over the last twelve months and an even more impressive EBITDA growth of 394.26% during the same period.
InvestingPro Tips highlight NVIDIA's strong market position, noting that it's a "Prominent player in the Semiconductors & Semiconductor Equipment industry." This aligns with the analyst's bullish outlook on the company's data center sector potential. Additionally, the tip indicating that "Analysts anticipate sales growth in the current year" corroborates HSBC's optimistic sales forecasts for the upcoming quarters.
The company's financial health is further underscored by its "Impressive gross profit margins," which stand at 75.98% for the last twelve months. This robust profitability supports NVIDIA's ability to invest in innovation and maintain its competitive edge in the AI GPU market.
It's worth noting that NVIDIA is trading near its 52-week high, with its current price at 97.66% of the peak. This, combined with the InvestingPro Tip suggesting a "Strong return over the last three months," reflects the market's confidence in NVIDIA's growth trajectory.
For investors seeking a more comprehensive analysis, InvestingPro offers 22 additional tips on NVIDIA, providing a deeper understanding of the company's financial position and market outlook.
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