TLDR
- Bank of America reiterated a $350 price target on Nvidia (NVDA), with the stock opening Wednesday at $219
- NVDA is trading at a 40%-50% discount to AI compute peers on an enterprise value-to-free cash flow basis
- The stock is also 31%-36% below the S&P 500 valuation, which BofA calls a “compelling opportunity”
- Nvidia is still 7% below its 52-week high of $236.54, hit on May 14
- Stifel analyst Ruben Roy expects Nvidia to “beat and raise” at its Aug. 26 earnings report
Nvidia (NVDA) opened Wednesday at $219, and Bank of America thinks that price is a bargain. BofA analyst Vivek Arya reiterated a $350 price target on the stock, implying nearly $130 of upside from current levels.
Arya’s note to clients, sent Tuesday, pointed to Nvidia’s valuation as the core thesis. The stock is trading at a 40%-50% discount to AI compute peers on an enterprise value-to-free cash flow basis. It is also sitting 31%-36% below the S&P 500 on the same metric.
BofA says that discount is mispriced. Arya argued the gap is “overstating the risks” tied to investments in private AI firms like OpenAI and Anthropic, and urged institutional clients to take entry positions now.
Why BofA Sees a Rally Ahead
A key part of BofA’s bull case is Nvidia’s $105 billion infrastructure commitment to OpenAI. The bank says this positions Nvidia not just as a chip supplier, but as an active builder in the AI ecosystem, supplying power, real estate, and chips to neo-clouds and frontier labs.
Arya also highlighted a strategic safety net. As cloud giants like Amazon, Alphabet, and Microsoft develop their own custom silicon, Nvidia has been expanding its buyer network by backing smaller AI companies. That gives the company a secondary market if large orders slow down.
Despite an 8% rally over the past month, NVDA is still 7% below its 52-week high of $236.54, set on May 14.
Earnings on Deck
All eyes are now on Aug. 26, when Nvidia reports earnings. Stifel analyst Ruben Roy is expecting a beat-and-raise quarter.
Roy pointed to a strong earnings season overall, noting CSP capital expenditure was raised, Foxconn’s cloud and networking segment crossed 50% of revenue for the first time, and Super Micro booked over $60 billion in new orders in a single quarter.
Roy did flag that gross margin, not demand, is the main area to watch. Memory costs and inference competition could weigh on margins but he believes these risks are already partly priced into the multiple.
Market positioning going into Aug. 26 is bullish. Investors are expecting strong results and a confident tone from CEO Jensen Huang on the call.
The stock closed Wednesday down 2.34%, continuing a pattern of short-term volatility even as the longer-term analyst outlook remains firmly positive.
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