Bank of America Names Nvidia Its Top Chip Stock Ahead of a 43% Earnings Move

Bank of America keeps Nvidia as its top sector pick into earnings

BofA has kept Nvidia as more than a long-term favorite. The firm maintained its Buy rating and $350 price target and also said Nvidia is positioned to beat its second-quarter targets, which makes the upcoming report more important than a routine update.

August 26 gives investors a near-term catalyst

Nvidia is scheduled to report Wednesday, August 26 after market close. Written commentary is expected at approximately 1:20 p.m. PT, followed by the conference call at 2 p.m. PT. For traders, that compressed window matters because the first reaction often depends on whether guidance and margin commentary confirm the bull case.

BofA also broadened the setup beyond Nvidia alone by lifting its 2026 semiconductor revenue target to $1.3 trillion. That does not guarantee a bigger move in NVDA, but it does suggest the bank sees a wider chip-market rally behind the story.

The core bull case still rests on demand, margins, and product timing

Revenue is climbing while margins remain unusually strong

In the first quarter, Nvidia posted revenue of $81.6 billion and 75.0% non-GAAP gross margin. Those figures show a business still growing quickly and keeping most of each incremental dollar.

That backdrop is why BofA's near-term target matters. The bank expects fiscal second-quarter revenue of $94 billion to $95 billion. If Nvidia clears that bar and keeps margins near recent levels, the debate shifts from whether demand exists to whether scarcity and pricing power are holding up.

Pricing power is not just a narrative here. BofA pointed to spot GPU rental prices hovering near record highs - reaching $5.66 per hour for B200 chips in support of its view that demand remains tight.

Product roadmap extends the upgrade cycle

BofA also highlighted the product pipeline. Blackwell is described as 10x–15x better gen-over-gen, and management says Vera Rubin platform remains on schedule for the second half of 2026. That keeps the cycle alive well beyond a single quarter.

The firm's valuation case adds to the setup. BofA described Nvidia as trading at 16 times projected 2027 earnings per share, calling that the stock's lowest forward P/E in ten years. Whether the market accepts that framing after earnings is the real test.

What would confirm or break the trade after earnings

The cleanest read of the setup is simple:

• Revenue needs to clear BofA's $94 billion to $95 billion second-quarter revenue view.
• Management needs to keep Vera Rubin on schedule for the second half of 2026.
• Gross performance should stay close to the recent 75.0% non-GAAP gross margin.
• The third-quarter view of $107 billion to $108 billion needs to hold up.

There is also a timing issue to keep in mind. Options already reflect an 8% post-earnings move, so a routine beat or miss may not be enough. The market likely cares more about whether guidance and roadmap commentary justify holding a premium multiple.

For a broader read-through, BofA's semiconductor basket includes Nvidia, Broadcom, Marvell, AMD, Applied Materials, Lam Research, Cadence, and Synopsys. If those names move with Nvidia, it would support the idea that the bank is pointing to a sector-wide cycle rather than a one-stock trade.

The invalidation is straightforward: a miss, softer guidance, or signs that the product ramp is slipping would weaken the thesis quickly.