An HSBC analyst upped their target price for Nvidia (NASDAQ:NVDA) stock on Friday, citing notable upside potential stemming from the chip giant's pricing power with its NVL (Nvidia Virtual Link) server racks in fiscal 2026.
“We believe Nvidia will continue to demonstrate its strong pricing power via its NVL36/NVL72 server rack system and GB200 platform, which will once again surprise the market on the upside in FY26,” analysts said in a note, hiking the 12-month price objective on NVDA from $1,050 to $1,350.
Previously, HSBC noted that Nvidia's 2025 AI product roadmap could lead to substantial pricing advantages, with the GB200 having an average selling price (ASP) of $60,000 to $70,000, compared to the standalone B100 GPU's ASP of $30,000 to $35,000.
Now, analysts are even more optimistic about Nvidia's financial outlook, projecting that the company could achieve FY26 revenue of $196 billion.
This prediction is based on the ASPs of $1.8 million for the NVL36 and $3 million for the NVL72 server racks, with an expected sales volume of 35,000 units.
Nvidia is set to report its fiscal Q1 2025 results on May 2022, and analysts expect the chipmaker to report sales of $26 billion, exceeding the company's guidance of $24 billion and consensus estimates of $24.5 billion.
They project Q2 sales reaching $28 billion, topping the consensus of $26.8 billion. However, FY25 is seen as a transitional year, with expectations for eased chip-on-wafer substrate (CoWoS) capacity tightness in the second half of 2024 due to supply increases and the delayed launch of the B100 product.
“Therefore, we see limited room for significant earnings upside over the next two quarters ahead of its B100 & GB200 launch in 4Q24,” analysts wrote.