NVIDIA Stock Soars with HSBC’s $320 Target on Major AI Growth
HSBC analyst Frank Lee has significantly updated his investment outlook on NVIDIA (NVDA) stock. He has upgraded it to a Buy recommendation from Hold and increased the price target to $320, up from $200.
NVIDIA Stock Price Surge
This new price target suggests a potential upside of approximately 78%, considering Tuesday’s closing price of $180. Lee attributes this optimism to NVIDIA’s robust product pipeline, diverse customer base, and rising chip production.
Forecasts for NVIDIA’s AI Revenue and Profits
Lee has revised his forecasts for NVIDIA’s earnings, particularly focusing on their data center business in the AI sector. He expects substantial growth, projecting FY27 data center revenue to reach $351 billion. This represents a 36% increase above Wall Street’s consensus estimate of $258 billion.
- New FY27 earnings forecast: $8.75 per share
- Market average forecast: $6.48 per share
Rising Demand for AI Chips
Lee highlights an accelerating demand for NVIDIA’s AI graphics processing units (GPUs). The customer base is expanding beyond traditional cloud providers like Amazon and Microsoft to include large projects such as OpenAI and Stargate. He estimates that upcoming AI GPU sales could generate between $250 billion and $400 billion over the next few years.
Projected Increase in GPU Production
HSBC anticipates a significant boost in NVIDIA’s GPU production through its partnership with Taiwan Semiconductor Manufacturing Company (TSMC). Output is projected to reach 700,000 wafers by FY2027, marking a 140% increase from current production levels.
Geopolitical Considerations
While U.S.–China trade tensions pose short-term risks, Lee believes a potential easing by 2026 could benefit NVIDIA’s sales in China. This is especially relevant as local competitors, including Huawei and Cambricon, strive to enhance their capabilities.
Current Consensus on NVIDIA Stock
According to TipRanks, NVIDIA holds a Strong Buy consensus rating on Wall Street, supported by 35 Buy ratings, one Hold, and one Sell recommendation. The average stock price target of $225 indicates a potential upside of nearly 25%. So far, NVIDIA’s stock has gained 34% year-to-date, showcasing its strong market performance.
