Bank of America Maintains Buy Rating on NVIDIA with Target Price of $350

Bank of America has maintained its Buy rating on NVIDIA (NVDA) with a target price of $350, expecting that revenue and earnings guidance for the second fiscal quarter could exceed market expectations by 3% to 4%, driven by the expansion of Vera Rubin's mass production. The bank believes that the performance numbers are not the most important focus of this earnings report; instead, the market should pay attention to whether NVIDIA discloses any long-term off-balance-sheet commitments made to ensure chip supply, power, AI models, and customer demand. Bank of America points out that while quantifying the potential liabilities related to this cannot completely eliminate the risks associated with AI infrastructure construction, it helps the market reassess NVIDIA's currently suppressed valuation. In September 2025, when NVIDIA announced a $100 billion investment plan for OpenAI corresponding to 10GW of computing power, its forward EV/EBITDA was about 27 times. Since then, this valuation multiple has dropped by 44% to around 15 times, less than half of AMD's approximately 32 times. Bank of America believes that the current discount has overly factored in the worst financing scenario of about $500 billion, equivalent to 10% of enterprise value, including long-term procurement commitments and cloud service contracts of $150 billion to $200 billion. If AI demand remains strong, NVIDIA may not need to bear the costs of idle capacity or stranded assets. Bank of America also recommends that NVIDIA increase shareholder returns, expecting that NVIDIA could generate about $1 billion in free cash flow daily next year, sufficient to support both ecosystem commitments and stock buybacks.

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