Bank of America‘s (BAC 0.16%) top semiconductor analyst, Vivek Arya, recently raised Nvidia‘s (NVDA 4.39%) price target from $300 to $320, implying roughly 42% upside from its closing price as of May 15. The bullish call is supported by Bank of America’s increasingly optimistic view of the AI opportunity.
The company has raised its estimate of the total addressable market for AI data center systems from $1.4 trillion annually to $1.7 trillion by 2030. The research company also expects Nvidia to continue capturing more than 70% of the AI infrastructure market in the coming years, despite intensifying competition from Advanced Micro Devices and other companies developing custom chips.
Image source: Getty Images.
The upside potential may seem difficult to justify, especially since Nvidia’s market capitalization has already crossed $5.7 trillion. But the company’s strong business fundamentals suggest that the bullish case may be more realistic than it first appears.
Robust business momentum
Nvidia’s financial momentum remains stellar. The company generated $215.9 billion in fiscal 2026 (ending Jan. 25, 2026) revenue, up 65% year over year, while gross margin was above 71%. The company is guiding for revenue in the range of $78 billion, plus or minus 2%, for the first quarter of fiscal 2027.
Today’s Change
(-4.39%) $-10.35
Current Price
$225.39
Key Data Points
Market Cap
$5.5T
Day’s Range
$224.30 – $231.50
52wk Range
$129.16 – $236.54
Volume
5.8M
Avg Vol
171M
Gross Margin
71.07%
Dividend Yield
0.02%
This exceptional growth is driven by high amounts of customer spending. Nvidia’s four largest customers, Amazon, Microsoft, Alphabet, and Meta Platforms, are together expected to spend over $700 billion on AI infrastructure in calendar year 2026.
Nvidia CEO Jensen Huang has also highlighted that Nvidia has strong visibility into more than $1 trillion in expected demand for its Blackwell and Rubin AI systems through the end of 2027. Previously, the company had indicated high-confidence demand and purchase orders of around $500 billion from 2025 to the end of 2026.
Expanding opportunity
Nvidia’s Blackwell system has strengthened the company’s position in the rapidly growing AI inference (real-time deployment of AI models) market. Huang now expects agentic AI to be a major growth opportunity for the company. Unlike traditional AI models that respond only when prompted, agentic AI systems can work more autonomously, completing tasks continuously in the background. That could significantly increase demand for computing power over time.
Nvidia has also highlighted that customers are not focusing solely on buying chips, but also on the ability to generate AI output efficiently. The company notes that its next-generation systems generate significantly more AI output for the same amount of power, thereby justifying higher hardware prices. Huang has suggested that adding more AI infrastructure components, such as inference acceleration technology, storage, and central processing units (CPUs), could meaningfully expand spending per AI deployment compared with earlier Blackwell systems.
While hyperscalers remain the primary growth driver, management has indicated that roughly 40% of Nvidia’s broader AI infrastructure opportunity could come from outside major cloud providers, including enterprise on-premise data centers, industrial AI applications, and regional cloud operators.
Nvidia is also securing AI infrastructure capacity through an investment of up to $2.1 billion in AI data center operator IREN and funding glassmaker Corning‘s new optical networking factories.
While Nvidia still faces risks, including intensifying competition, customer concentration, and export restrictions, its expanding AI infrastructure opportunity suggests that Bank of America’s bullish thesis may be more realistic than it initially appears.
