Nvidia Price Target Raised As Analyst Adjusts Model (NVDA)

Nvidia's stock (NASDAQ: NVDA) has pulled back 3.62% in the past two trading sessions, as questions about the potentially cyclical nature of the AI sector has raised a few questions. This morning brings renewed optimism from the street, evidenced by Barclays raising its price target on the stock, fueled by expectations of substantial growth in artificial intelligence (AI) capacity additions.

Barclays increased its price target on NVDA to $240 from $200 while maintaining an Overweight rating. This significant adjustment stems from revised estimates projecting $2 trillion in AI capacity additions by the end of the decade. The firm highlights that previous total addressable market expectations now appear increasingly realistic, positioning Nvidia as a leading beneficiary within its coverage group.

Barclays' revised price target is underpinned by an implied earnings per share (EPS) of $7.85, based on a 30x multiple and incorporating $35 billion in revenue related to Nvidia's recent strategic partnership with OpenAI. This collaboration involves a massive $100 billion investment from Nvidia to deploy over 10 gigawatts of Nvidia systems for training and operating next-generation AI models. This investment is expected to significantly bolster Nvidia's market dominance and drive substantial revenue growth in the coming years.

The firm's analysis suggests a potential $2 billion revenue upside for July, revealed in their supply chain analysis post-Q1 earnings. This led to an increased Compute revenue forecast from $35.6 billion to $37 billion. While Blackwell chip production reached 30,000 wafers per month in June, slightly below the anticipated 40,000, utilization rates remain robust, and the supply chain outlook is positive for the remainder of 2025.

Long-Term Bullish Outlook

Beyond the Barclays upgrade, broader analyst projections paint an even more bullish picture. Some forecasts suggest Nvidia could potentially become the world's first $10 trillion company by 2030, driven by its dominant position in the AI chip market and the escalating demand for AI applications across various sectors. These projections are predicated on Nvidia's existing strong market share and the anticipated exponential growth in AI-related revenues.

Nvidia's strategic investments in key AI infrastructure, exemplified by the OpenAI collaboration, further cements its position as a critical enabler of the AI revolution. The company's ability to capitalize on the surging demand for AI processing power is expected to translate into sustained revenue growth and continued market outperformance.