Nvidia (NVDA) Stock: BofA Sets $350 Target, Citing 60% Upside Potential

Key Takeaways

Table of Contents

Bank of America maintains its $350 price target for Nvidia (NVDA), which opened at $219 on Wednesday
The chipmaker trades at a 40%-50% discount compared to AI computing competitors based on enterprise value-to-free cash flow metrics
NVDA’s valuation sits 31%-36% under the S&P 500 average, presenting what BofA describes as an attractive entry point
The stock remains 7% off its 52-week peak of $236.54 reached on May 14
Stifel’s Ruben Roy anticipates Nvidia will exceed expectations and raise guidance during its Aug. 26 earnings call

With Nvidia (NVDA) trading at $219 as of Wednesday’s open, Bank of America believes investors are looking at a significant buying opportunity. BofA’s equity analyst Vivek Arya has reaffirmed his $350 price objective for the chipmaker, suggesting potential gains approaching $130 per share from present trading levels.

NVIDIA Corporation, NVDA

In Tuesday’s client communication, Arya emphasized valuation metrics as the foundation of his bullish stance. When measured by enterprise value-to-free cash flow, Nvidia is currently priced at a 40%-50% markdown relative to competing AI infrastructure providers. The company also trades at a 31%-36% discount versus the broader S&P 500 index using identical valuation measures.

According to BofA’s analysis, this valuation gap represents a market mispricing. Arya contends the discount is “overstating the risks” associated with capital deployment in private artificial intelligence ventures such as OpenAI and Anthropic, recommending institutional investors establish positions at current price levels.

BofA’s Case for Upside Momentum

Central to Bank of America’s optimistic outlook is Nvidia’s $105 billion infrastructure partnership with OpenAI. The investment firm views this arrangement as transforming Nvidia from merely a semiconductor vendor into a comprehensive AI infrastructure partner, delivering power solutions, facility access, and processing hardware to emerging cloud providers and advanced AI research facilities.

Arya also emphasized a defensive strategic approach. While major cloud platforms including Amazon, Alphabet, and Microsoft pursue in-house chip development initiatives, Nvidia has been diversifying its customer portfolio by investing in emerging AI startups. This strategy provides the company with alternative revenue channels should demand from hyperscale customers moderate.

Although NVDA shares have climbed 8% during the past 30 days, the stock continues trading 7% beneath its 52-week high of $236.54 established on May 14.

Upcoming Earnings Report in Focus

Investor attention has now shifted toward Aug. 26, when Nvidia releases quarterly results. Stifel’s equity analyst Ruben Roy forecasts the company will surpass consensus estimates and increase forward guidance.

Roy referenced a robust earnings period across the sector, observing that cloud service provider capital spending forecasts were increased, Foxconn’s cloud and networking division exceeded 50% of total revenue for the first time, and Super Micro secured more than $60 billion in fresh orders within a single quarter.

Roy cautioned that gross profit margins, rather than revenue demand, represent the primary uncertainty factor. Rising memory component costs and increased competition in AI inference applications could pressure profitability, though he suggests these headwinds are partially reflected in current valuation multiples.

Market sentiment heading into the Aug. 26 report appears constructive. The investment community anticipates solid financial performance and optimistic commentary from CEO Jensen Huang during the earnings conference call.

Shares declined 2.34% in Wednesday’s session, extending a trend of near-term price fluctuations despite sustained positive sentiment from Wall Street analysts over the medium to long term.

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