Bernstein Raises NVIDIA Price Target to $400

Bernstein SocGen Group analyst Stacy A.

Rasgon raised the price target on NVIDIA (NASDAQ: NVDA) to $400 (from $315) while maintaining an Outperform rating.

“NVIDIA’s FQ2 results solidly beat ($96.2B/$2.22 vs Street at $92.3B/$2.09).

Datacenter upsided on continued Blackwell momentum with strength across both Hyperscale customers (up 13% QoQ and 102% YoY) and ACIE customers (up ~25% QoQ and 138% YoY).

Edge Computing revenues were also above consensus ($7.2B vs Street at consensus $6.6B).

Guidance was once again well above expectations ($108.0B/~$2.46 vs Street $104.6B/ $2.36) with datacenter likely at $100B+ amid strong Rubin ramp (seen at ~20% of segment revenues).

Importantly, the company hugely upticked FY28 (CY27) expectations, with sales now seen growing by ~70% YoY, significantly ahead of current expectations.

Recent gross margin worries given memory pricing dynamics did prove correct with margins guided down somewhat (74% in Q3 bottoming to ~71-72% in Q4, and recovering somewhat to 72-73% next year as price increases take effect) but appear manageable.

This quarter should remind NVIDIA investors why they own the stock.

Demand remains not only off the charts but continues to apparently accelerate amid what looks to be (once again) the largest impending product cycle in the company’s history as the Rubin ramp kicks off in a material fashion.

Indeed, the revenue increase next year (and beyond) seems staggering, with numbers (both sell side and, importantly, probably buy-side) likely to move up sharply, with more upside to come if the company can resolve constraints.

Management got out in front of gross margin worries (and we would argue that holding to just a couple points of degradation in the current memory environment qualifies as a strong accomplishment).

And it is becoming increasingly clear that the company’s balance sheet is as much of a moat as their technology, giving them the ability to secure hundreds of billions of dollars of critical components (far more than anyone else), as well as support and grow the ecosystem around their products.”

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