On Tuesday, Wells Fargo updated its financial outlook for NVIDIA Corporation (NASDAQ:NVDA) shares, raising the price target to $1,150 from the previous $970. The firm maintained its Overweight rating on the stock.
This adjustment reflects Wells Fargo's increased revenue estimates for NVIDIA's Data Center business, which are now expected to significantly contribute to the company's growth over the next few years.
The updated estimates by Wells Fargo indicate a substantial increase in NVIDIA's financial performance, with fiscal year 2025 and 2026 revenue projections now set at $108.3 billion and $142.9 billion, respectively.
This marks an increase from the earlier forecasts of $104.7 billion and $117.9 billion. Earnings per share (EPS) estimates for these years have also been revised upward, from $23.30 to $24.14 for fiscal 2025, and from $26.00 to $32.00 for fiscal 2026.
Wells Fargo also introduced its initial forecast for fiscal year 2027, anticipating NVIDIA's revenue to reach $169.9 billion with an EPS of $38.00. These projections are based on the expectation of continued robust growth in NVIDIA's Data Center revenue, which is a key driver for the company's future financial performance.
For fiscal years 2025, 2026, and 2027, the Data Center revenue is estimated to be $93.2 billion, $126.4 billion, and $151.4 billion, respectively. These figures represent a year-over-year growth of 96% for fiscal 2025, 36% for fiscal 2026, and 20% for fiscal 2027. According to Wells Fargo, the compound annual growth rate (CAGR) for NVIDIA from fiscal 2024 to fiscal 2027 is expected to be around 47%.
The positive outlook from Wells Fargo is solely attributed to the increased revenue estimates from NVIDIA's Data Center segment, which is anticipated to drive the company's growth and financial success in the coming years. The revised price target and financial forecasts underscore the optimism surrounding NVIDIA's market position and its potential for continued revenue expansion.
InvestingPro Insights
Wells Fargo's upbeat assessment of NVIDIA's financial future aligns with key metrics and insights from InvestingPro. NVIDIA is currently trading at a high earnings multiple, with a P/E ratio of 75, reflecting investor confidence in its growth prospects. The company's revenue growth has been particularly impressive, with a staggering 125.85% increase over the last twelve months as of Q4 2024. This is further bolstered by a quarterly revenue growth of 265.28% in Q4 2024, showcasing NVIDIA's strong performance and potential for sustained expansion.
InvestingPro Tips highlight that NVIDIA is a prominent player in the Semiconductors & Semiconductor Equipment industry, and analysts predict the company will continue to be profitable this year. Moreover, NVIDIA's stock price has experienced a significant uptick over the last six months, with a 82.08% return, underscoring the robust investor sentiment. For investors seeking more comprehensive analysis, there are additional InvestingPro Tips available, which can be accessed for NVIDIA at https://www.investing.com/pro/NVDA. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, offering even more insights to aid in making informed investment decisions.
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