BofA Raises Price Target on Nvidia to $180

BofA analyst Vivek Arya reaffirmed on May 28, 2025 its ‘Buy’ rating on Nvidia, raising the price target from $160 to $180.

“Opportunity & execution best-in-class, raise estimates and PO to $180

Blackwell back on track, we see I-t $10 EPS power

Three major takeaways from the Q1 call:

1) China derisked, with $15bn In 1H sales of H20 product now already in the model,

2) Blackwell racks in full production, with every large hyperscaler now ramping close to 1K racks/week, 13K racks/quarter or -$30bn+/q at $2.5mn+ rack ASP (or $100bn+ across the top few hyperscalers, though NVDA didn’t quantify further), and

3) NVDA confident In GM recovery back to mid-70s % sometime later in the year, another sign of Improving demand and rack-scale execution.

Networking also returned to low/mid-double-digit of Data Center revenue in Q1, as NVDA’s complete portfolio of NVLink (Scale-Up). Quantum/Spectrum (Scale-Out), and BlueField (DPUs/NICs) in rack-scale systems is now fully ramping across multiple hyperscalers (Inclusive of new Google/Meta win for Spectrum-X) – an Incremental AVGO headwind.

We reiterate Buy on top pick NVDA, raising our FY26/27/28E pf-EPS by 6%/2%/12% to $4.21/$5.87/$7.23, and PO to $180 from $160 on higher 30x PE vs 28x prior given faster EPS growth.

Likes: $10 In I-t EPS power, Al capex diversifying

Our FY28E (effectively CY27E) pf-EPS of $7.23 Is aligned with $277bn in data center sales and $325-$350bn TAM (at 80-85% NVDA share).

If we use a higher Industry TAM assumption of $450-$500bn and same NVDA share, It paves the way for $10+ In CY27/FY28E pf-EPS, conceptually.

Second, we highlight NVDA’s 50% FCF margins (2.6x Mag-6 average of 19%) and compelling 0.9x PEG (vs Mag-6 at 3x).

Third, Al capex Is diversifying from just US clouds to now multiple sovereign deployments, including the recent Saudi Arabia announcement (see our related report).

Risks: Faster product cadence increases execution risks

NVDA’s plan to launch cutting edge products every year (October) is admirable but Increases execution risks, similar to the -2 quarter delay in we saw In Blackwell rack execution.

Second, (lumpy) deployment of data centers with rellable access to high power is as much of a bottleneck in Al deployments as access to chips and systems.

Last, we can’t Ignore headline or real risks from use of (or restriction on) Al products as a bargaining tool in global trade deals.”

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