On Monday, HSBC has increased its price target on shares of NVIDIA (NASDAQ:NVDA), a leading tech company known for its graphics processing units (GPUs), from $880 to $1,050. The firm has also reiterated its Buy rating on the stock. This adjustment comes as HSBC expresses optimism about NVIDIA's artificial intelligence (AI) product strategy, which is expected to expand its market presence.
NVIDIA's upcoming GB200 AI platform is at the center of HSBC's positive outlook. The platform is unique as it will integrate NVIDIA's own Grace Hopper CPU with the B200 AI GPU, marking the company's first use of in-house CPUs.
This strategic move is anticipated to grant NVIDIA more control over the entire value chain and enhance its ability to set higher average selling prices (ASP) for its GB200 chip, which could range from $60,000 to $70,000. In comparison, the current standalone B100 GPU platform is priced between $30,000 and $35,000.
HSBC forecasts that the shift towards NVIDIA's higher-priced B series GPU and the new GB200 product, which combines both CPU and GPU technologies, will significantly contribute to the company's financial performance. Consequently, HSBC has raised its fiscal year 2026 earnings per share (EPS) estimate by 18% to $35.30. This increase reflects the expected higher ASPs and additional revenue from new markets, including software.
The price target of $1,050 is derived by applying a 30x price-to-earnings (PE) ratio to the estimated fiscal year 2026 EPS of $35.30. Additionally, HSBC's scenario analysis suggests a potential 4% to 11% increase in fiscal year 2026 sales and earnings, which could lead to an EPS range of $36.58 to $39.15. Under the same 30x PE ratio, this scenario would imply a higher valuation range of $1,097 to $1,175 for NVIDIA's stock, all else being equal. The GB200 AI platform is expected to be a highlight at the upcoming NVIDIA GTC conference next week.
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