Bank of America (BofA) has raised its price target for Nvidia (NASDAQ: NVDA) to $180 from $160, reaffirming the semiconductor giant as its top pick.
The June 1 update follows Nvidia’s stellar Q1 2025 earnings report, with NVDA shares climbing over 2% to $137.94 at press time.
BofA analyst Vivek Arya remains bullish, highlighting that Nvidia’s next-generation Blackwell chips are now in full production.
To this end, the company is ramping up efforts to reach over $100 billion in sales from hyperscalers like Amazon, Google, and Microsoft. This expansion is poised to boost Nvidia’s long-term earnings significantly.
In line with this growth, BofA also raised its EPS estimates for fiscal years 2026 through 2028 by 6% to 12%. The new forecasts project EPS of $4.21 in 2026, $5.87 in 2027, and $7.23 in 2028. Arya believes Nvidia could reach $10 EPS, driven by robust Blackwell chip sales.
Impact of geopolitical risks on NVDA stock
Despite geopolitical risks, including tensions with China, Arya pointed out that Nvidia has already factored in $15 billion in H20 chip sales to Chinese customers.
Gross margins are expected to recover to the mid-70% range by year-end, supported by expanding sales and strong demand for networking products like NVLink and Spectrum-X. These products have secured major deals from Google and Meta, posing fresh challenges for Broadcom.
Meanwhile, BofA emphasized that the global expansion of AI capital expenditures is diversifying geographically, with notable investments from regions such as Saudi Arabia. Nvidia’s impressive 50% free cash flow margin distinguishes it from major tech peers.
However, Arya cautioned that challenges remain, including accelerated product cycles, execution risks, data center power constraints, and ongoing geopolitical tensions.
Notably, the outlook boosts confidence in Nvidia following its recent earnings beat: the company posted adjusted EPS of $0.96, surpassing the anticipated $0.93, and revenue of $44.06 billion, exceeding forecasts of $43.31 billion.
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