KeyBanc Reiterates Overweight on NVIDIA, $330 PT

KeyBanc analyst John Vinh reiterated an Overweight rating and $330 price target on NVIDIA (NASDAQ: NVDA)

“NVDA reported strong F2Q (Jul) results and provided F3Q (Oct) guidance, which solidly exceeded expectations.

F2Q DC revs of $89B grew +117% y/y with both Hyperscale and ACIE (Neocloud) growing over 100%.

In FY28, NVDA sees 70% rev growth (ACIE growing faster than Hyperscale) vs. cons of +45%, with growth supply constrained vs. demand of 100%. GM in FY28 was reset lower to 72.5% vs.

75% due to higher memory pricing. Reg financing, NVDA highlighted its investments were all investment grade with its capacity being fungible in case of default.

As such, we’re raising ests and remain Overweight.

Mgmt highlighted a rev-sharing financing model, providing take-or-pay commitments (min. rev. guarantees) on a portion of neocloud capacity, helping lenders finance projects while NVDA participates in revs above the floor.

NVDA indicated it gets paid twice through upfront HW sales and rental RR share, which mgmt believes can drive $Bs of revs over the MT/LT.

Additionally, NVDA has $50B invested in Frontier AI Labs, and has partnered with Apollo, BR, Blackstone, Brookfield, GS, and KKR targeting >$500B of third-party capital, and customer deployments that are either inv grade or backed by inv grade counterparties.

The compute is fully fungible, limiting downside risk. OpenAI commitments through 2030 are ~12GW, pointing to longer-duration and stronger demand driving these structures.”

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