Oppenheimer Reiterates NVIDIA at Outperform, $175 Price Target

Oppenheimer reiterated an Outperform rating and $175 price target on NVIDIA ahead of its F4Q (January) results.

NVIDIA reports Wed (Feb. 26).

We see upside to F4Q (Jan.) results and F1Q (Apr.) outlook led by sustained CSP AI accelerator demand. H200 demand possibly stronger than expected near-term as supply-constrained Blackwell ramps.

We estimate H200 30% of mix this year. GB200 in full production since Dec. Sovereign AI is emerging as a meaningful growth driver.

Notable announcements include the $500B Stargate fund in the US, the >$200B InvestAI initiative in the EU, and a $110B AI investment project in France.

Hyperscale CapEx is now expected up ~40% this year (>$300B vs $220B in CY24) — 2x early-January predictions. We reiterate our Outperform rating and $175 target.

Data Center (88% of revenue) is expected up 8% Q/Q (+81% Y/Y) in F4Q, led by H200, with F4Q Blackwell sales likely ~$5B and a robust ramp expected in F1Q.

CSP custom AI ASIC projects coexist with GPUs, in our view — ASICs primarily used for internal workloads while GPUs are used for broader, dynamic, higher-performance AI applications.

Networking (9% of DC) is expected up 8% Q/Q (flat Y/Y) in F4Q, with Spectrum-X Ethernet shipping in volume and expected to reach multi-billion-dollar sales within 12 months.

Gaming (9%) is expected down 8% Q/Q (+5% Y/Y) in F4Q on tight supply following the January launch of 50-series GPUs.

Auto (1%) is expected up 15% Q/Q (+84% Y/Y).

Gross margin guided down ~150bps Q/Q in F4Q to 73.5% as Blackwell ramps, with GM expected in the low-70%s near-term before returning to ~75% in 2H.

Trading at ~26x our CY26E EPS versus a five-year average of 37x, NVDA remains best positioned in AI, benefiting from full-stack AI hardware/software. We remain long-term buyers.

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