BofA lifts NVIDIA stock price target to $200 on strong AI position

On Thursday, BofA Securities analyst Vivek Arya increased the price target on NVIDIA shares, listed on (NASDAQ:NVDA), to $200 from the previous $190, while reaffirming a Buy rating for the stock. According to InvestingPro data, NVIDIA maintains a perfect Piotroski Score of 9, indicating exceptional financial strength, while the platform’s analysis suggests the stock is currently fairly valued. Arya praised NVIDIA for its commanding role in driving the artificial intelligence (AI) market, highlighting its focus on compute-intensive inference, agentic applications, and physical AI/robotics. Arya also pointed out NVIDIA’s attractive valuation, trading at approximately 29 times and 22 times the estimated price-to-earnings (PE) for calendar years 2025 and 2026, respectively. This valuation is considered compelling when contrasted with a price-to-earnings growth rate of over 30% compared to the S&P 500 and the ’Magnificent Seven’ tech giants, which trade at more than twice that multiple.

Despite facing several challenges, including the DeepSeek project, the transition to the new Blackwell architecture, and restrictions in China, NVIDIA has demonstrated robust financial performance. The company’s fiscal fourth quarter (FQ4) sales soared by 78% year-over-year to $39.3 billion, surpassing consensus estimates by 3%. InvestingPro data reveals an impressive last twelve months revenue growth of 152.44%, with total revenue reaching $113.27 billion. Furthermore, NVIDIA’s guidance for the first fiscal quarter (FQ1) was set at $43 billion, approximately $1 billion ahead of expectations and reflecting a 66% increase year-over-year. For deeper insights into NVIDIA’s growth trajectory and 18 additional exclusive ProTips, consider exploring InvestingPro’s comprehensive analysis.

The FQ4 results were particularly bolstered by nearly $11 billion in sales from the Blackwell product line, which far exceeded the anticipated $4 to $7 billion range. This strong performance has provided reassurance that the Blackwell product is progressing as planned. However, Arya noted that the costs associated with ramping up Blackwell production are expected to compress gross margins (GM) to 71% in FQ1, slightly below the consensus of 72%. InvestingPro shows NVIDIA’s impressive gross profit margin of 75.86% over the last twelve months, demonstrating the company’s strong pricing power and operational efficiency. The analyst anticipates that gross margins will likely remain flat into the second fiscal quarter (Q2) before recovering in the second half of the year.

In other recent news, NVIDIA has reported significant financial achievements and strategic advancements. The company posted strong fourth-quarter sales for January and first-quarter sales for April, exceeding Wall Street forecasts by $1.2 billion and $1 billion, respectively. NVIDIA’s Data Center revenue reached $35.6 billion, reflecting a 16% increase from the previous quarter, driven by the Blackwell technology, which alone generated $11 billion in revenue. Despite the impressive revenue figures, NVIDIA’s gross margin for the first quarter was reported at 71%, slightly below expectations due to initial costs associated with the Blackwell ramp-up. However, analysts from firms like Piper Sandler and Oppenheimer expect the gross margin to recover to mid-70% levels by the end of 2025.

Mergers were not highlighted in recent reports, but the company is expanding its client base, working with several customers that have extensive cluster systems. In terms of analyst ratings, Piper Sandler, TD Cowen, and Oppenheimer have maintained their positive outlooks on NVIDIA, with price targets ranging from $175 to $190. KeyBanc and Evercore ISI also upheld their favorable ratings, citing NVIDIA’s successful ramp-up of the Blackwell processor and strong demand outlook. Analysts have noted the strategic advantage of NVIDIA’s CPU/GPU/DPU combination and its potential for continued growth in the data center sector.

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