Nvidia Stock Rises. Why This Analyst Sees a Nearly 80% Gain Ahead.

Nvidia chips are the favored choice for training artificial-intelligence models. (Akio Kon/Bloomberg)

Key Points

• Nvidia stock rose 1.1% to $181.93, with investors focusing on AI chip demand despite earlier competition concerns.
• HSBC raised Nvidia’s rating to Buy with a new Street-high price target of $320, indicating a nearly 80% potential gain.
• Nvidia’s AI chips show strong demand, with Nscale Global Holdings deploying 116,600 GPUs and strong benchmark performance.

Nvidia stock was rising Wednesday as investors moved past competition concerns and focused on demand for its artificial-intelligence chips, with a new highest price target on Wall Street.

The chip maker’s shares were up 1.1% at $181.93 in early trading after falling 4.4% on Tuesday.

The previous day’s drop came following a deal between rival chip company Advanced Micro Devices and cloud company Oracle , suggesting Nvidia could face increased competition in the AI processor market in future.

But attention now looks to be shifting back to Nvidia’s own growth potential. HSBC analyst Frank Lee raised his rating on Nvidia to Buy from Hold in a research note on Wednesday, raising his target price to $320 from $200.

The significant increase establishes a new highest target price for Nvidia on Wall Street according to a FactSet poll, and indicates a nearly 80% gain from current levels.

“We see less risk over our previous concerns of AI GPU inventory correction,” Lee wrote. “Our bottom-up analysis indicates that recent Nvidia AI deals imply potential AI GPU revenue opportunity of $251 billion-$400 billion just from Stargate and OpenAI commitments, which could double our FY27 [fiscal year 2027] datacenter revenue forecast of $351 billion.”

Elsewhere, Oppenheimer analyst Rick Schafer wrote in a research note Wednesday that Nvidia remains one of his top picks in the semiconductor sector, citing its superior performance-per-watt for AI workloads. He has an Outperform rating and $225 target price on Nvidia shares.

Nvidia’s currently available GB200 NVL72 AI server outperformed AMD’s offerings for performance and efficiency in the newly released SemiAnalysis InferenceMAX benchmarks. Inference is the process of generating answers from AI models.

Further signs of demand for Nvidia’s hardware continue to come in the wider market.

U.K.-based Nscale Global Holdings said Wednesday it would deploy a total of 116,600 Nvidia graphics-processing units across sites in Texas and Portugal, as part of an AI infrastructure agreement with Microsoft .

Among other chip makers, Advanced Micro Devices was rising 2.3% and Broadcom was gaining 1.5% in morning trading.

Write to Adam Clark at adam.clark@barrons.com