Barclays has significantly increased its price target for Nvidia (NASDAQ: NVDA) to $200 from $170, signaling strong confidence in the chipmaker’s continued growth trajectory.
The new price target indicates a 38% upside from the previous day’s close.
This optimistic adjustment is primarily driven by compelling evidence of robust demand observed across Nvidia’s extensive supply chain, coupled with anticipated improvements in gross margins.
More upside for Nvidia
The upgrade comes after Barclays’ thorough analysis revealed approximately “$2 billion in upside in July for Nvidia vs. Street numbers.”
This substantial projected increase in revenue prompted the firm to revise its full-year Compute revenue estimate for Nvidia upwards, from $35.6 billion to an impressive $37 billion.
Such a notable revision underscores the analysts’ conviction in Nvidia’s capacity to outperform market expectations, largely fueled by an unyielding demand for its cutting-edge computing solutions.
A critical factor contributing to Barclays’ heightened outlook is the impressive ramp-up in Blackwell capacity.
According to Barclays, Blackwell capacity reached approximately 30,000 wafers per month in June.
Though this was less than the bank’s previous forecast of 40,000, it points out that utilization is healthy and supply chains look positive for the second half of 2025.
This increased production capability is vital for meeting the escalating demand for Nvidia’s high-performance graphics processing units (GPUs), which are crucial for advancements in artificial intelligence, data centers, and other compute-intensive applications.
The ability to scale production effectively mitigates concerns about supply constraints and positions Nvidia favorably to capitalize on the burgeoning market for its technology.
Margins to also improve
Furthermore, Barclays analysts anticipate that both “Ultra” and higher volume shipments will play a pivotal role in boosting Nvidia’s gross margins in the second half of the year.
Nvidia’s system sales have improved. The segment has contributed 25% of the company’s revenue in July, and Barclays expects the contribution to reach 50% by October.
Because of this, Barclays increased the company’s third and fourth calendar quarter forecasts to $42 billion and $48 billion, respectively.
The bank’s new price target of $200 is by valuing the firm at a 29x multiple to its 2026 non-GAAP earnings per share (EPS) estimate of $6.86.
The earlier EPS estimate was $6.43.
According to the bank, even with the recent run-up of the stock, Nvidia has the most upside potential in its coverage.
Nvidia shares were flat on Tuesday. It had surged nearly 2% on Monday after markets cheered its European expansion spree.
The decision by Barclays to lift Nvidia’s price target to $200 reflects a broader industry sentiment that recognizes Nvidia’s dominant position in the AI and high-performance computing sectors.
As global reliance on advanced computing power continues to surge, particularly with the rapid expansion of AI technologies, Nvidia’s innovative hardware and software ecosystem remains indispensable.
The company’s consistent ability to deliver groundbreaking products and meet the demands of an evolving technological landscape solidifies its market leadership.
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