Nvidia and AI: A Promising Partnership
Nvidia (NASDAQ:NVDA) and artificial intelligence seem to be a fruitful combination. Jensen Huang’s drive for innovation has propelled Nvidia to become the most valuable company globally. However, some people are starting to wonder if the excitement around AI is creating a bubble in the market.
ETF AI Analysts Step In
In contrast, Loop Capital analyst Ananda Barua believes the enthusiasm for AI is not only still alive but also intensifying, especially concerning Nvidia.
“Our analysis indicates that we are entering a new ‘golden wave’ of AI adoption, with Nvidia at the forefront of a significant increase in demand,” Barua mentioned, placing him among the top 5% of stock analysts.
As a result, Barua has assigned a Buy rating to NVDA, raising the price target from $250 to a high of $350. If this target is met, investors could see returns of up to 75% in just one year.
“We know the suggestion of a 75% increase in the next few quarters sounds ambitious, but it’s a reflection of our thorough analysis,” he added, emphasizing his confidence.
His optimism stems from evidence showing that NVIDIA is on the brink of substantial growth in GPU shipments, which he predicts will nearly double over the next year or so as it boosts its average selling price and networking capabilities.
Nvidia intends to ramp up its GPU shipments from 1.1 million units per quarter, with gradual increases of around 200,000 units over the next five quarters, aiming to hit approximately 2.1 million units per quarter by January 2027. This would lead to total shipments of roughly 7.4 million units in 2026, compared to 4.7 million in 2025. Nvidia has set its sights on shipping 8 to 10 million units in 2027.
Barua observes a significant potential upside beyond public expectations, predicting Nvidia’s quarterly earnings might reach around $3.00 (current estimates are $2.88). This would translate to about $12.00 per share annually. He argues that this perspective is supported by the company’s historical P/E ratio of 30x. He also believes Nvidia will continue to enhance its Blackwell cycle in the coming year, likely leading to further investor rewards. As the outlook for 2027 becomes clearer, he considers $400 a realistic price target, based on projected earnings of $14.00 EPS at 30x P/E.
“And this isn’t even factoring in the software’s potential,” he added.
This optimistic outlook isn’t unique. Besides one Hold and one Sell rating, the other 36 recent evaluations on NVDA have been positive, forming a consensus of Strong Buy. If we take the average target of $237.21, the stock price might rise 19% in the next year.
