HSBC Analyst Upgrades Nvidia Stock
Frank Lee, a leading analyst at HSBC, has raised Nvidia’s (NVDA) stock rating from “hold” to “buy,” increasing the price target significantly from $200 to $320. This new target hints at a potential rise of about 78% based on the closing price of $180 observed on Tuesday. According to Lee, the company’s impressive product offering, diverse customer base, and ramping up of chip production position it as a leading candidate in the AI hardware sector.
Analysts Adjust AI Revenue and Profit Anticipations for Nvidia
Lee, who has a solid reputation, noted that Nvidia’s AI data center segment is growing at an unexpectedly rapid pace, suggesting “significant FY27 revenue upside.” He now forecasts that data center revenue will hit $351 billion in fiscal 2027—this is 36% higher than the market consensus, which stands at $258 billion. Additionally, HSBC has revised its earnings projection for Nvidia in 2027 to $8.75 per share, surpassing the average market expectation of $6.48.
This optimistic financial outlook is, as Lee mentioned, fueled by increasing demand in the global AI chip market.
AI Chip Demand Remains Strong
Lee observed a sign of continual growth in the AI GPU market, with demand emerging not just from established cloud giants like Amazon (AMZN) and Microsoft (MSFT), but also from ambitious new projects such as OpenAI and Stargate. He speculated that AI GPU sales could range from $250 to $400 billion in the forthcoming years, illustrating the market’s fast-paced expansion.
HSBC anticipates a notable uptick in Nvidia’s GPU production at TSMC (TSM), predicting an output of 700,000 wafers by 2027—an increase of 140% from present levels. Lee highlighted that this growth mirrors robust demand in the industry and a strong long-term outlook for Nvidia’s high-end AI chips.
China’s Market Outlook Could Improve
Lee also addressed the trade tensions between the U.S. and China, viewing them as a short-term risk that might ease by 2026, assuming a new trade agreement is reached. He suggested that Nvidia could see a sales rebound in China, despite local chip manufacturers like Huawei and Cambricon aiming to close the competitive gap.
Is It Time to Purchase Nvidia Stock?
According to TipRanks, Wall Street has assigned a consensus rating of Strong Buy to Nvidia stock, backed by 35 buy recommendations, along with just one hold and one sell rating. The average price target of $225 indicates about a 25% potential upside. Notably, NVDA stock has appreciated by 34% since the year’s start.
