Three analysts and AI industry experts re-rate Nvidia - we've compiled everything important for you to know
Nvidia continues to receive strong tailwinds after its earnings, and this time it's not just a slight improvement in forecasts -
but a significant change in the outlook, especially regarding growth rate, demand for AI infrastructure, Vera Rubin chips, and profitability.
Here are the four important updates:
1. Bank of America - target price $350, "buy" recommendation
Bank of America sees a particularly strong picture for the coming years, emphasizing three key points:
Growth of about 70% in 2028, well above the market forecast of about 45%, with demand already exceeding supply and production being the bottleneck
Nvidia disclosed multi-year supply agreements totaling approximately $500 billion,
in line with the bank's initial estimates
Gross margin is expected to decrease from 75% to 72%-73% due to rising memory prices
But here comes the interesting part,
Bank of America still sees significant potential for increased profitability and earnings per share going forward.
The bank maintains its earnings per share forecast for 2027 at $9.09, raises the forecast for 2028 to $15.72, an increase of 19%, and the forecast for 2029 to $23.17.
Additionally, the earnings per share forecast for 2030 increases from $25 to $31.
Despite the decline in multiples for large technology companies, Bank of America maintains a target price of $350, using a price to earnings ratio of 22.
According to the bank, Vera Rubin is expected to account for about 20% of data center sales as early as Q3, with a rapid adoption rate among large customers
Additionally, the value Nvidia generates from each gigawatt of infrastructure is expected to increase:
Blackwell - about $25 billion Vera Rubin - about $40 billion Future generations - $50 billion and above
In other words, Nvidia is not just selling more chips; it is increasing the economic value of each AI infrastructure unit.
Bank of America also estimates that in 2028, only about 25% of sales will come from a single AI research institute, meaning the customer base is becoming more diverse and includes countries, AI companies, and customers operating systems independently.
According to their calculations, earnings per share growth in 2026-2028 could reach about 60% annually on average, resulting in a PEG ratio of only about 0.3.
2. J.P. Morgan - target price increases from $280 to $320
J.P. Morgan maintains its "overweight" recommendation for Nvidia, but raises the target price to $320.
The main reason is that the company is starting to provide investors with a clearer framework for 2028.
The most important point is that Nvidia's forecast for 2028 is based on supply constraints.
In other words, the company is not saying that this is the maximum the market can demand, but rather that this is the rate it can supply under current production and infrastructure limitations.
If supply constraints are eased, potential demand could be significantly higher.
J.P. Morgan also notes the launch of Vera Rubin, which began mass production and shipments this month.
Nvidia's management described it as the fastest production ramp-up in the company's history - and this is particularly significant because investors previously feared a transition to a new architecture.
Regarding profitability, J.P. Morgan agrees that memory creates short-term pressure, but sees a recovery in 2028.
One reason is that Nvidia has signed HBM agreements at fixed prices for a large portion of the quantities it needs, which effectively creates a certain "floor" for profitability and reduces uncertainty.
3. Melius Research - target price increases from $400 to $420
Melius goes even further.
The firm maintains its "buy" recommendation and raises the target price to $420.
The main argument is that even after the expected decline in gross margin, Nvidia is still expected to grow by more than 70% in the coming year.
Melius forecasts that Nvidia will achieve earnings per share of $23 on annual revenue of approximately $1 trillion in the second half of fiscal year 2029.
Additionally, according to their estimate, more than 60% of free cash flow will be directed towards returning capital to shareholders.
This could mean more significant share buybacks in the coming year,
but perhaps the most interesting data point is on the demand side.
According to Melius, the very fact that Amazon is deepening its cooperation with Nvidia is further proof of the strength of demand.
Their forecast is particularly aggressive: Nvidia could hold more than 50% of a total AI market exceeding $2 trillion even before 2030.
The common message from the three updates is very clear:
Nvidia's problem right now is less about demand and more about the ability to meet that demand with supply.
Yes, gross margin is decreasing due to memory prices, and this is a risk that needs to be considered.
But at the same time, profit and sales forecasts continue to rise, customer commitments are growing, Vera Rubin is entering production faster than expected, and investment houses still see significant potential for 2028-2030.