Wall Street analysts continue to hike their price targets on NVIDIA (NASDAQ:NVDA) as the second quarter earnings season starts in earnest and the AI craze booms.
Today it was BofA Securities analysts' turn. The analysts raised their price target to $550 from $500.
"The company’s accelerators (for servers) are essential in managing compute intensive AI workloads," the analysts commented. "Indeed, given we are in just the early stages of AI investment, only ~10% of cloud servers are “accelerated” today. Plus, NVDA also boasts other formidable AI products essential in operating an AI data center (networking equipment, software solutions)."
Amid the AI momentum, the analysts lifted FY24/FY25 sales estimates by 2% and 10%, respectively. They raised EPS to $7.86 and $11.05, up 3% and 10%, respectively.
They note the new price target is based on a multiple of 50x their calendar year 2024 EPS estimates, which they note is still within its long-term 26x-69x historical trading range.
Looking further ahead, the analysts see calendar year 2027 EPS power for NVIDIA of $22. "... our math suggests an AI accelerator TAM of $110bn by CY27. If we assume NVDA market share modestly declines to 70% (more competition in inferencing), it implies NVDA accelerator sales reaching $77bn by CY27."
While the firm didn't suggest an even higher price target based on that $22 number, if you were to multiply that by the current price target multiple of 50x you can work out a price target of $1,100 - or double the firm's current price target.