Bank of America Recommends Holding Nvidia Stock After GTC Conference
Following the recent GTC conference, Bank of America has recommended holding Nvidia stock, signaling a strong outlook for the technology giant. CEO Jensen Huang’s keynote presentation was marked by significant announcements, contributing to Nvidia’s remarkable achievement of surpassing a $5 trillion market capitalization.
Positive Market Outlook for Nvidia
Bank of America analyst Vivek Arya, among the top 3% of stock experts, recently engaged with Nvidia’s CFO Colette Kress and the Investor Relations team. Arya shared that the discussion was “very positive,” encouraging his optimistic view of Nvidia’s market potential.
Data Center Orders Projected to Exceed Expectations
Nvidia is projected to secure $0.5 trillion in data center orders for the 2025/2026 calendar year. This figure is approximately 10% higher than the Street’s estimate of $446 billion and is based on a conservative assumption of $25 billion in content per gigawatt.
- Data Center Order Projection: $0.5 trillion for CY25/26
- Street Estimate: $446 billion
- Content per Gigawatt: $25 billion (conservative estimate)
Recent roadshow materials hinted at a more ambitious target of $30 to $40 billion per gigawatt, linked to a total capital expenditure of $50 to $60 billion. Arya noted that if Nvidia follows through with a total buildout of 20 gigawatts in CY25/26, there could be further upside to order projections.
Product Pipeline and Production Capacity
Arya also discussed the company’s strong gross margins, which are expected to remain in the mid-70s, attributed to robust product strength and support from memory suppliers. Nvidia aims to ship over 10 million GPUs if the demand justifies it.
- Potential GPU Shipments: Over 10 million
- Gross Margin Target: Mid-70s
Currently, Nvidia is experiencing around 10 million orders for the Blackwell and Rubin GPUs for the same fiscal period, which Arya believes might increase.
Impact of U.S.-China Relations on GPU Supply
The situation with tariffs and trade relations between the U.S. and China remains critical. There’s a chance that Nvidia and its competitor AMD could resume GPU shipments to China. However, demand for older-generation hardware is diminishing in China, and unless new products are approved for export, Arya anticipates the contribution from China to be negligible.
Nvidia’s Valuation Remains Attractive
Despite achieving a historic market cap, Arya maintains that Nvidia’s valuation remains compelling. He rates the stock as a Buy, with a price target of $275, forecasting a potential gain of 35.5% in the upcoming months.
Wall Street consensus reflects a strong bullish sentiment for Nvidia, with a unanimous Strong Buy rating based on 36 Buy ratings against 1 Hold and 1 Sell. The average target price suggests a 12-month return of approximately 15%, with a current target of $233.82.
As analysts continue to monitor Nvidia’s performance closely, the company is seen as a leading player in the AI and technology sectors, ready to leverage emerging opportunities.
