Despite quarterly volatility, the financial giant remains confident in Nvidia’s growth potential, ability to execute and market dominance.
Bank of America (BofA) updated his forecast for Nvidiaraising its target price to $165 per share from $150, and reaffirming its ‘buy’ rating. buyThis adjustment follows the company’s fiscal second quarter 2025 results, which it disclosed after markets closed on Wednesday.
Despite the recent 2% drop in Nvidia shares, which now stand near $122, compared with initial declines of 7%, Bank of America’s analysis remains optimistic.
The firm sees Nvidia as its top pick in the sector, noting that while there may be short-term volatility, the company remains the biggest long-term beneficiary of the generative AI boom. Positives include the continued growth and robustness of the Hopper chip. However, risks include uncertainty around the timeline of the next Blackwell chip.
The detail of BofA’s position
Bank of America’s report highlights that despite a strong second quarter with sales of $30 billion versus the $28.6 billion expected, the outlook for the third quarter could lead to some volatility in the stock.
nvidia
Reuters
Third-quarter sales are expected to reach $32.5 billion, just above the consensus of $31.9 billion but below the most optimistic expectations of between $33 billion and $35 billion. This is partly due to the delay in the introduction of the Blackwell chip, which could be pushed back a quarter.
Additionally, BofA notes an increase in Blackwell-related costs in the near term, with a projected margin of approximately 73% for the fourth quarter, compared with an estimated 75% for the third. Despite the quarterly volatility, Bank of America remains confident in Nvidia’s growth potential, its ability to execute and its market dominance, with a market share of over 80%, especially at a time when investment in generative AI is still in its early stages.
Source: Ambito
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