One of the last holdouts on Nvidia's stock now predicts 78% upside. Here's the thesis.

By Britney Nguyen

HSBC analysts now think Nvidia has the potential to vastly exceed Wall Street expectations for data-center revenue as the company’s customer base broadens

HSBC analysts raised their price target for Nvidia’s stock on Wednesday.

One of the last holdouts among sell-side analysts just upgraded Nvidia Corp. shares to buy, predicting more upside for the stock at the center of the artificial-intelligence race.

What will drive the stock higher? An “ever-increasing” total addressable market for AI graphics processing units, which captures the potential for increased spending from a broader range of customers – not just cloud-service providers.

That total addressable market, which underlies the current generative-AI boom, is all the more likely to expand in fiscal 2027, HSBC analysts said in their Wednesday upgrade. At the same time, there’s renewed momentum for CoWoS allocation – referring Chip on Wafer on Substrate, the advanced chip packaging technology from Taiwan Semiconductor Manufacturing Company Ltd. (TW:2330) – and Nvidia’s (NVDA) allocation should go up.

That allocation “will not only lead to upward revision” for Nvidia’s data-center revenue in that period beyond consensus expectations, but is also supportive of the analysts’ view that the market opportunity is expanding, the HSBC team wrote.

The team’s bull case models Nvidia’s data-center revenue reaching $390 billion in fiscal year 2027. That compares with the roughly $253 billion FactSet consensus. HSBC’s base-case estimate is still above the consensus view, at $351 billion.

The analysts also see big upside for the stock. Their new $320 target price, up from $200 before, implies upside of 78% from Tuesday’s close near $180.

Analysts are overwhelmingly bullish on Nvidia’s stock, as 60 of 66 tracked by FactSet now have buy-equivalent ratings. The $320 target from HSBC is one of the highest listed.

See more: Why Nvidia’s $100 billion investment in OpenAI signals a major transformation

The HSBC analysts also said that China’s restrictions on Nvidia’s GPUs could ease with a U.S.-China trade deal in the January quarter, allowing the chip maker to regain its dominance in the country.

While the Chinese government is encouraging local companies to become more self-sufficient on homegrown chips from companies such as Huawei and Cambricon, the analysts said that they “do not believe there is enough foundry capacity” at Chinese chip manufacturer Semiconductor Manufacturing International Corporation, “or a narrowing of GPU performance gap” between Chinese companies and Nvidia or Advanced Micro Devices Inc. (AMD) to allow for total independence in the next one to two years.

Read: Nvidia’s Jensen Huang seems to disagree with Trump on this big AI topic

Without even factoring in the potential for chip exports to China, the HSBC team raised their fiscal year 2027 earnings estimate to $8.75 a share, which tops the FactSet consensus of $6.46.

Separately, Nvidia was involved in the $40 billion acquisition of Aligned Data Centers, which got announced Wednesday morning. The company is part of the Artificial Intelligence Infrastructure Partnership, which also includes BlackRock, Global Infrastructure Partners, Microsoft Corp. (MSFT) and MGX. AIP is making the purchase and sees the opportunity for Aligned to “accelerate the expansion of its footprint, drive further innovation, and continue delivering next-generation data-center solutions,” according to a release.

-Britney Nguyen

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10-15-25 0913ET

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