A team of financial analysts at HSBC raised their price target for Nvidia Corporation (NVDA) shares on Friday, indicating significant growth potential due to the semiconductor company’s ability to set high prices for its NVL rack server systems ( Nvidia Virtual Link) in fiscal 2026.
“We expect Nvidia to maintain its strong ability to command high prices across its NVL36/NVL72 rack server systems and GB200 platform, which we expect to positively outperform market forecasts in fiscal 2026,” the analysts said in a report , raising the 12-month price target on NVDA from $1,050 to $1,350.
Previously, HSBC had highlighted that Nvidia’s AI product strategy for 2025 could lead to significant pricing advantages, with an average price of the GB200 expected between $60,000 and $70,000, in contrast to the average price of the single B100 graphics processing unit of $30,000-35,000.
Now analysts are expressing more confidence in Nvidia’s economic forecasts, estimating that the company could reach revenues of $196 billion in fiscal 2026.
This estimate assumes average prices of $1.8 million for the NVL36 and $3 million for the NVL72 server rack systems, with an expected sales quantity of 35,000 units.
Nvidia is expected to announce financial results for the first quarter of fiscal 2025 in May 2022, and analysts expect the semiconductor maker to report revenue of $26 billion, exceeding both the company’s forecast of $24 billion and its analysts’ average forecast of $24.5 billion.
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Second quarter sales are estimated to reach $28 billion, beating the average forecast of $26.8 billion. However, fiscal 2025 is considered a transition period, with the expectation of an easing of chip-on-wafer substrate (CoWoS) manufacturing constraints in the second half of 2024 due to increased supply and postponement of the introduction of the B100 product.
“As a result, we expect limited potential for substantial earnings growth over the next two quarters, prior to the launch of the B100 and GB200 products in the fourth quarter of 2024,” the analysts noted.
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