On Thursday, Wolfe Research exhibited confidence in NVIDIA (NASDAQ:NVDA) shares, increasing the tech giant's price target to $180 from the previous $150. The firm maintains an Outperform rating on the shares, emphasizing NVIDIA's strong positioning in the artificial intelligence (AI) sector.
The new price target is founded on an approximately 42 times multiple of the projected calendar year 2025 earnings per share (EPS) of $4.26. This valuation slightly exceeds NVIDIA's average multiple of around 37 times over the past five years. Wolfe Research justifies the elevated multiple with an anticipation of nearly 50% revenue growth for NVIDIA next year.
NVIDIA continues to be a top pick for Wolfe Research, largely due to its pivotal role in the ongoing AI revolution. The analyst's only reservation stems from the universally positive investor sentiment surrounding the stock. Despite not being as attractively valued as it was a year prior, the stock's current multiple of 34 times the forecasted fiscal year 2026 EPS is considered reasonable given NVIDIA's growth trajectory.
Wolfe Research also sees potential for significant upside to its fiscal year 2026 EPS estimate of $4.26. The firm points to a "clear line of sight" to over $200 billion in data center revenue, driven by supply chain forecasts and the ramp-up of the Blackwell product line. This revenue could potentially translate into around $5 in EPS.
The analyst's outlook is further bolstered by the ongoing demand for NVIDIA's products, which continues to outstrip supply, suggesting that the growth estimates may still be conservative.
In other recent news, NVIDIA has seen a series of positive adjustments by various analyst firms. Craig-Hallum raised NVIDIA's share target to $175, maintaining a Buy rating, while DA Davidson increased the target to $135.
Rosenblatt Securities also upgraded their price target to $220, keeping a Buy rating. Itau BBA sustained an Outperform rating with a steady price target of $164.00, expressing confidence in NVIDIA's earnings per share (EPS) momentum.
These upgrades follow NVIDIA's record-breaking total revenue of $35.1 billion, surpassing expectations. The revenue outlook for the next quarter is estimated at $37.5 billion. The company's Blackwell chips are expected to significantly contribute to revenue streams, with production shipments projected to ramp up in the fourth quarter.
Despite potential short-term pressure on gross margins due to the initial ramp-up of the Blackwell product, margins are expected to rebound in the second half, returning to the mid-70% level. High demand for Blackwell is expected to outstrip supply for several quarters due to supply limitations. These recent developments underscore NVIDIA's strong financial performance and strategic position within the rapidly expanding AI industry.
InvestingPro Insights
NVIDIA's impressive financial performance and market position align closely with Wolfe Research's bullish outlook. According to InvestingPro data, NVIDIA boasts a staggering revenue growth of 194.69% over the last twelve months, with a quarterly growth of 122.4% in Q2 2025. This exceptional growth trajectory supports Wolfe Research's projection of nearly 50% revenue growth for the coming year.
The company's strong profitability is evident in its gross profit margin of 75.98% and operating income margin of 61.87%, both for the last twelve months. These figures underscore NVIDIA's ability to maintain high margins despite rapid expansion, a key factor in its attractiveness to investors.
InvestingPro Tips highlight NVIDIA's perfect Piotroski Score of 9, indicating robust financial health and operational efficiency. Additionally, the company has maintained dividend payments for 13 consecutive years, demonstrating consistent shareholder returns alongside its growth story.
While NVIDIA's P/E ratio of 67.04 might seem high, it's worth noting that InvestingPro Tips suggest the company is trading at a low P/E ratio relative to near-term earnings growth. This aligns with Wolfe Research's view that the current valuation is reasonable given NVIDIA's growth prospects.
For investors seeking a deeper understanding of NVIDIA's potential, InvestingPro offers 22 additional tips, providing a comprehensive analysis of the company's financial health and market position.
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