HSBC Adjusts NVIDIA Price Target Amid Datacenter Revenue Concerns

On Sunday, HSBC analyst Frank Lee lowered NVIDIA's (NASDAQ:NVDA) price target from $195 to $185 while maintaining a Buy rating. The adjustment reflects anticipated challenges in the first half of fiscal year 2026, despite the company's robust overall financial health.

Key Financial Highlights

• Revenue Growth: NVIDIA has delivered an impressive 152% revenue growth over the last twelve months.
• Financial Health: According to InvestingPro data, NVIDIA holds a perfect Piotroski Score of 9, indicating financial robustness.
• Market Cap: The company remains a semiconductor industry leader with a market capitalization of $3.33 trillion.

Revised Projections for Fiscal 2026

• Datacenter Revenue:
  • Revised estimate: $236 billion, down from the previous $253 billion.
  • Still 28% higher than the Visible Alpha consensus forecast of $184 billion.
• AI Server Racks:
  • Expected deployment of 35,000 NVL 72 equivalent AI server racks, reduced from the prior 41,500 racks.

Bear-Case Scenario

Even in a conservative scenario of deploying 20,000 to 25,000 AI server racks, NVIDIA's EPS would still exceed market consensus:

• Consensus EPS: $4.50.
• Bear-case EPS: 8-14% above consensus.

EPS and Blackwell Platform Impact

• HSBC revised its fiscal 2026 EPS estimate down by 6%, reflecting a slower rollout of the Blackwell platform in H1.
• Despite this, HSBC projects an EPS of $5.74, which is 28% above the consensus estimate.

Analysis with APIs

To explore NVIDIA's revenue growth and profitability metrics over time:

• The Ratios API (TTM) provides insights into profitability and valuation metrics.
• For detailed annual and quarterly financial performance, use the Full Financials API.

Conclusion

Despite short-term challenges, NVIDIA's strong financial fundamentals and leadership in the semiconductor industry continue to support its long-term growth prospects. The revised price target reflects caution in the datacenter segment but highlights significant upside potential for investors.