Nvidia's stock (NASDAQ: NVDA) has had a bullish revision from the street this morning, helping the price recapture some of Tuesday's decline, with a 2.36% uplift in today's pre-market session.
HSBC upgraded Nvidia to a ‘Buy' rating from ‘Hold,' significantly raising the price target to $320 from $200. This bullish stance is predicated on the expectation of substantial earnings growth by fiscal year 2027, driven primarily by increased demand for advanced AI chips, extending beyond the traditional cloud computing sector.
The firm anticipates that Nvidia's fiscal year 2027 datacenter revenue could reach $351 billion, a figure 36% higher than consensus estimates, suggesting a potentially significant upside for the company.
Adding to this positive outlook is the potential for a recovery in the Chinese market. HSBC believes that a U.S.-China trade agreement could alleviate the uncertainties surrounding Nvidia's GPU sales in China, leading to a resurgence in demand.
HSBC's fiscal year 2027 earnings per share estimate stands at $8.75, considerably above the consensus of $6.48, even without factoring in any revenue from chip exports to China, demonstrating a strong conviction in Nvidia's growth prospects.
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