Bank Of America Hikes Nvidia Price Target To $180, Sees Annual Earnings Per Share To Hit $10

Despite delivering a staggering 1,100% return since October 2022, Nvidia Corp NVDA may still have meaningful upside ahead.

On Thursday, Bank of America's top semiconductor analyst Vivek Arya reiterated a Buy rating on the stock. He lifted his earnings forecasts and boosted the price target from $160 to $180. This implies a further 30% rally from current levels.

Shares climbed 3% to $139 by 2:00 p.m. ET, touching $143.84 intraday — the highest since February — as investor confidence grew on the heels of Nvidia's latest earnings report. The Santa Clara, California-based firm highlighted resilient margins and accelerating data center momentum.

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Nvidia's Growth Story Just Got Even Stronger

Arya is forecasting long-term earnings power of $10 per share, driven by the company's AI hardware dominance.

Arya estimates Nvidia holds 80-85% of the total market for AI data center chips — a position he describes as “best-in-class in opportunity and execution.”

The expert upped the earnings forecast for calendar year 2027 to $7.23 per share, up 12%. One of the key reasons for this upgrade is the rapid ramp-up of Nvidia's Blackwell platform.

"Blackwell racks are now in full production," Arya said, with major hyperscalers deploying close to 1,000 units per week.

Given a $2.5 million-plus average selling price per rack, this points to a quarterly revenue opportunity exceeding $30 billion. When extended across Nvidia's top-tier customers, that could mean over $100 billion in annual revenue potential from just a few hyperscalers.

The analyst also noted that China is now "de-risked," as Nvidia's $15 billion in H20 chip sales for the first half of 2025 have already been modeled. That visibility into China demand reduces near-term geopolitical uncertainty, a major concern for investors following tightening U.S. export controls.

Another pivotal development is the expected rebound in gross margins, which Arya sees returning to the mid-70% range by the end of 2025.

This improvement, he said, is a "sign of improving demand and rack-scale execution," helped in part by networking solutions like NVLink, Spectrum-X and BlueField, which are now widely deployed.

Cash Flow Strengthens The Investment Case

Arya continues to see Nvidia's fundamentals as uniquely strong. The company's free cash flow margin is hovering around 50%, more than twice the 19% average among the ‘Magnificent Seven.’

He also underscored Nvidia's compelling valuation, with a price-to-earnings-to-growth ratio of just 0.9 compared to 3.0 for the peer group.

According to Arya, Nvidia stands to gain even more from the global AI infrastructure push, especially as capital expenditures extend beyond U.S. tech firms.

"AI capex is diversifying from just U.S. clouds to now multiple sovereign deployments," Arya said, pointing to recent developments in Saudi Arabia.

Using a broader total addressable market estimate of $450 billion to $500 billion, Arya indicates Nvidia could hit or surpass $10 per share in earnings by 2027 if its current market share holds.

What Could Go Wrong?

Still, Arya acknowledged several execution risks. The company's plan to launch major new products on an annual cycle — each October — could strain its supply chain and internal operations.

"Faster product cadence increases execution risks," he said, referencing delays seen during the initial Blackwell rollout.

He also flagged that reliable power and infrastructure remain key constraints in AI deployment.

"Deployment of data centers with reliable access to high power is as much of a bottleneck as access to chips," Arya said.

Last but not least, with AI now a strategic asset in global politics, Nvidia remains vulnerable to regulatory and trade policy risks — especially involving China and export controls.

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