HSBC Keeps Buy on NVIDIA, $175 Price Target

HSBC analyst Frank Lee reiterated a Buy rating and $175 price target on NVIDIA (NASDAQ: NVDA).

“No major surprises from GTC despite long-term AI GPU roadmap introduction: As expected, there were no major surprises from GTC given confirmation of 2H25 Blackwell Ultra (GB300) transition, and the Vera Rubin platform launch which will feature HBM4 as well as CPO spec upgrade were all widely expected.

More importantly, Vera Rubin NVL 144 (based on 144 GPU dies instead of exact number of GPUs) in 2H26 suggets no GPU content growth given 72 GPUs per NVL rack remains the same as Blackwell NVL 72.

Hence, pricing power and content growth seem limited except for additional memory and CPO content relative to the introduction of Blackwell NVL 72 rack architecture in last year’s GTC.

Rubin Ultra 576 (based on 144 GPUs) and Feynman GPU platform planned for 2H27 and 2028, respectively, also seem too far out for the market to digest.

Not enough clarity on Blackwell transition to allay market concerns: Nvidia CEO Jensen Huang talked about Blackwell GPU unit shipments of 3.6m in 2025 to its four CSPs (Amazon, Azure, Google, and Oracle).

We remain comfortable with our estimates of c4.2m total Blackwell shipments in 2025 given our expectation that the demand for Blackwell is mostly from hyperscalers.

The Nvidia CEO also talked about USD1trn datacentre capex by 2028 as well as foundation reasoning demand driven by Agentic AI to drive GPU demand for inference.

However, we think Nvidia did not give enough clarity over near-term Blackwell transition given ongoing market concerns over supply chain ramp as well as sustainability over CSP capex to drive AI GPU demand in FY26.

Auto & robotics AI TAM next potential catalysts but timing and scale still unclear: Nvidia also highlighted GR00T N1, a fully customisable foundation model for generalised humanoid reasoning and skills as well as collaboration with General Motors on next generation vehicles.

We do see auto and robotics as the next significant potential AI markets that could lead to further re-rating or earnings upside surprise.

However, timing and scale remain too early to quantify and to be rewarded by the market.

Reiterate Buy with TP of USD175 unchanged: Our FY26 EPS estimate of USD5.12 remains 12% above consensus of USD4.59.

Our datacentre revenue estimate of USD210bn is 12% higher than the consensus estimate of USD188bn as we still expect Nvidia to ramp Blackwell as expected in FY26.

Our TP of USD175 is derived by applying our target FY26e PE of 34x to our FY26 EPS of USD5.12.

Our TP of USD175 implies c52% upside from current levels; accordingly, we maintain our Buy rating on the stock.

Key downside risks include: slower-than-expected mix shift towards higher ASP AI GPUs; lower investment from cloud service providers in generative AI; weaker-than-expected overall datacentre momentum; and geopolitical uncertainties.”

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