BofA Securities Reiterates Buy on NVIDIA, $220 Price Target

BofA Securities analyst Vivek Arya reiterated a Buy rating and $220 price target on NVIDIA (NASDAQ: NVDA).

“Maintain Buy ahead of Aug-27 FQ2 (Jul) earnings call. Stock has had a strong run YTD so some near-term volatility is to be expected.

Specifically, we see: 1) FQ2 sales beat: $47bn vs. $45.8bn consensus and $45bn guide on continued ramp of Blackwell, robust cloud spend (more below); 2) FQ3 raise: mid-teens QoQ growth to $54bn vs. $52.5bn cons as Blackwell Ultra volume ramp adds on top, with potential to reach $57-60bn if H20 shipment officially resumes; 3) GM approaching 73-74% by FQ3 as rack-scale architecture gains scale, with incremental 200-300bps boost if H20 potentially utilizes previously written-off inventory ($5.5bn in FQ1); and 4) FY26/CY25 sales outlook rising toward $210-215bn (with China), and pf-EPS up to $4.70-4.80 (vs. $4.38 cons).

Overall, we see healthy beat/raise driven by a continuation of strong Blackwell/Ultra ramp, rising and diversifying AI capex (Google, Meta, Oracle, xAI, etc.), expanding pipeline and margins, as well as potential H20 resumption in F2H ($5-10bn increment).

However, note the H20 sales may be subject to potential security/backdoor probes by Chinese regulators.

The H20 could also become increasingly uncompetitive over time as local competition emerges, and NVDA (and AMD) would require a continuous update of license to ship “n-1” or “n-2” products in order to maintain the current performance lead.”

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