BofA Securities reiterated its Buy rating and $350 price target on Nvidia ahead of the company's second-quarter results. The firm expects a sales beat driven by the Vera Rubin ramp but says the bigger story is Nvidia's potential disclosure of multi-year, off-balance-sheet commitments to secure supply, power, models and demand.
BofA Securities reiterated a Buy rating and $350.00 price target on Nvidia (NASDAQ:NVDA) ahead of the company's second-quarter results.
InvestingPro data suggests the stock may be undervalued at current levels of $213, against a Fair Value of $260, placing it among undervalued names in the semiconductor space.
Sales beat expected on Vera Rubin ramp
BofA said Nvidia's second quarter should deliver a 3% to 4% sales beat and raise tied to the Vera Rubin ramp. However, the firm said the more important factor is Nvidia's potential disclosure of multi-year, off-balance-sheet commitments to secure supply, power, models and demand.
Nvidia's forward EV/EBITDA multiple has fallen 44% to approximately 15x since the company's first major deal. That deal was the $100 billion, 10-gigawatt OpenAI investment in September 2025. The current multiple is less than half of peer AMD's approximately 32x multiple. Nvidia's PEG ratio of 0.29 and P/E of 32.5 suggest attractive valuation relative to its growth profile.
Off-balance-sheet commitments in focus
BofA estimates Nvidia faces a worst-case funding burden of approximately $500 billion, or 10% of enterprise value. The estimate includes $150 billion to $200 billion required for multi-year purchase commitments and cloud service agreements.
Nvidia's free cash flow payout ratio stands at approximately 37% based on fiscal 2027 and 2028 consensus estimates. BofA said a move to 50% to 75% could provide support, noting Nvidia could generate nearly $1 billion daily in free cash flow by next year. The company generated $119 billion in levered free cash flow over the last twelve months.
Other analysts stay bullish
BMO Capital reiterated its Outperform rating, expecting Nvidia's second and third-quarter revenues could exceed Street consensus estimates by $2 billion to $3 billion on data center strength. Raymond James raised its price target to $352, maintaining a Strong Buy rating. The firm cited CPU revenue projected to rise from 3% to 5% of total sales by 2028.
KeyBanc maintained an Overweight rating with a $330 price target, pointing to Rubin R200 GPU shipments. Those shipments began mass production in July. Cantor Fitzgerald reiterated its Overweight rating and set a $350 price target, naming Nvidia a top pick amid high demand for AI technology.
Source: Investing.com
Trading involves risk.
Risk Disclaimer
