In a recent development, an analyst at HSBC has revised their price target for Nvidia (NASDAQ: NVDA) stock upwards, citing significant upside potential driven by the chip giant's NVL (Nvidia Virtual Link) server racks in fiscal 2026. The analyst noted Nvidia's strong pricing power with its NVL36/NVL72 server rack system and GB200 platform, projecting positive surprises in FY26.

Revised Price Target

The 12-month price objective on NVDA has been raised from $1,050 to $1,350 by HSBC, reflecting heightened optimism regarding Nvidia's future performance. This upward revision underscores the analyst's confidence in Nvidia's ability to leverage its product portfolio and technological innovations to drive growth and profitability.

Potential Revenue Growth

HSBC's revised financial outlook for Nvidia includes a projection of FY26 revenue reaching $196 billion. This optimistic forecast is based on the expected ASPs of $1.8 million for the NVL36 and $3 million for the NVL72 server racks, coupled with an estimated sales volume of 35,000 units. The analyst's bullish stance reflects a belief in Nvidia's continued success and market dominance in the coming years.

Fiscal Q1 2025 Expectations

Nvidia is scheduled to report its fiscal Q1 2025 results in May 2022, with analysts anticipating sales of $26 billion. This figure is expected to surpass both the company's guidance of $24 billion and consensus estimates of $24.5 billion. Additionally, projections for Q2 sales are optimistic, with expectations of reaching $28 billion, exceeding the consensus of $26.8 billion.

Transitional Year Outlook

While FY25 is considered a transitional year for Nvidia, with expectations for eased chip-on-wafer substrate (CoWoS) capacity tightness in the second half of 2024, analysts remain bullish on the company's long-term prospects. Despite challenges such as supply increases and the delayed launch of the B100 product, HSBC's optimistic outlook underscores confidence in Nvidia's resilience and strategic positioning in the semiconductor industry.

Conclusion

HSBC's upward revision of Nvidia's price target reflects a positive outlook on the company's growth prospects and market leadership. As Nvidia continues to innovate and capitalize on emerging opportunities in AI, data centers, and gaming, investors can expect continued value creation and potential investment opportunities in the semiconductor sector. For those interested in tracking stock upgrades and downgrades, including insights from analysts, explore the [Upgrades & Downgrades API](https://intelligence.financialmodelingprep.com/documentation#upgrades-downgradesUpgrades & Downgrades API).