BofA Securities Affirms Buy on NVIDIA, $350 PT

BofA Securities analyst Vivek Arya reiterated a Buy rating and $350 price target on NVIDIA (NASDAQ: NVDA)

“FQ2 should deliver the usual 3-4% sales beat/raise on the Vera Rubin ramp, but the headline is the least interesting part.

What matters is NVDA’s potential disclosure of its multi-year, off-balance-sheet commitments to lock down supply, power, models and demand.

Quantifying these liabilities won’t erase AI buildout risk, but it lets the market price properly into what we see as a depressed valuation.

NVDA’s first mega-deal, the $100bn/10GW OpenAI investment in Sep’25, marked trading near its 5yr historical forward EV/EBITDA of ~27x median.

The multiple has since collapsed 44% to ~15x, less than half of peer AMD’s ~32x. That haircut overstates the worst-case ~$500bn (10% of EV) funding burden.

(Our estimate includes the $150- $200bn required for multi-year purchase commitment and cloud service agreements).

In a bull case of resilient demand, NVDA may never shoulder the cost of unused capacity or stranded assets at all.

NVDA has called AI’s dawn the industry’s “iPhone moment.” NVDA should finish the analogy on cash returns.

From FY13-25 Apple returned 82% of FCF, retiring ~43% of shares, and that FY13 buyback pivot put a floor under the stock, lifting it from 4x to 25x EV/EBITDA currently.

Different cycles, lower capex, recurring services, all caveats apply, but NVDA’s ~37% FCF payout (FY27/28 consensus) looks modest. A move to 50-75% could offer real support.

By next year NVDA could be generating nearly $1bn DAILY in free cash flow, providing it more than enough firepower to support ecosystem commitments AND to dedicate a meaningful amount towards supporting the stock.”

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