Nvidia's Price Targets Elevated

Despite Nvidia's forecast of decelerating growth after a two-year boom fuelled by AI spending, analysts remain confident, raising price targets. At least ten firms have increased their 12-month price targets by an average of 3% to $202.60, suggesting a potential 12% gain.

Nvidia projects third-quarter revenue of $54 billion, a record but a somewhat conservative estimate compared to the anticipated $53.8 billion. While second-quarter results surpassed estimates, data centre revenue fell short of expectations. Concerns linger regarding the sustainability of AI system investment and US-China trade tensions.

Despite these factors, analysts maintain a bullish outlook, with Wedbush Securities suggesting a potential $5 trillion market cap by early 2026. Nvidia's CEO, Jensen Huang, anticipates $3-4 trillion in AI infrastructure spending by the end of the decade, and the company has approved an additional $60 billion in stock buybacks.