Bank of America raised its earnings per share estimates for Nvidia (NVDA.US) over the next few years, as the company has 80-85% of the potential $400bn market. The bank reiterated its "buy" rating on Nvidia and raised its target price to $190 from $165, implying nearly 40% upside from current levels.
Bank of America raised its EPS estimates for Nvidia to $2.87 in 2025 from $2.81; $4.47 in 2026 from $3.90; and $5.67 in 2027 from $4.72.
Analysts led by Vivek Arya at Bank of America said on Thursday: "We note that Nvidia's underappreciated FCF yield is over 45-50%, double the seven giants' average of 23-25%. In dollar terms, Nvidia could generate over $200bn in FCF over the next two years, comparable to Apple (AAPL.US) and providing growth optionality.
Bank of America also highlighted Nvidia's increasingly important role in working with companies such as Accenture (ACN.US), ServiceNow (NOW.US) and Microsoft (MSFT.US).
Shares of Nvidia rose nearly 4% during the day on Thursday, hitting a new intraday high of $140.89, after a strong earnings report from TSMC (TSM.US). The stock has risen 177% this year.