Nvidia receives price target high of $300 due to multi-trillion AI buildout: Cantor

[UK Hosts President Trump And First Lady Melania Trump For State Visit - Day Three]
Leon Neal

Nvidia (NASDAQ:NVDA [https://seekingalpha.com/symbol/NVDA]) shows no signs of slowing its efforts to dominate the processing power behind the multi-trillion-dollar buildout of artificial intelligence infrastructure, prompting Cantor to reiterate its "Top Pick" Overweight rating and increase its price target to a Wall Street high of $300 from $240.

The next highest target was set by Melius Research, which increased its target to $275 from $240 earlier this week. Goldman Sachs recently increased its price target to $210 from $200. Last month, Bank of America increased its target to $235 from $220, and Barclays boosted its target to $240 from $200. In August, Wells Fargo hiked its target to $220 from $185.

During early market action on Thursday, Nvidia shares had increased nearly 2%, reaching a new intraday record high. Shares have doubled in value in the last six months.

The new target follows a series of investor meetings Cantor analysts had with Nvidia's top executives this week, including CEO Jensen Huang and CFO Colette Kress. They discussed details of the new partnership [https://seekingalpha.com/news/4497243-nvidia-plans-to-invest-up-to-100b-in-openai-progressively-to-build-ai-data-centers] with OpenAI (OPENAI [https://seekingalpha.com/symbol/OPENAI]).

"The vision here is to remove margin stacking by server ODM's and CSP's, enabling the cost delta between NVDA and ASICs to only an average of 15% - truly a win-win for both and placing potentially further pressure on the ASIC market," said Cantor analysts, led by C.J. Muse, in a Thursday investor note. "The company continues to work at Extreme Co-Design at an annual cadence, enabling the optimization of the entire AI Infrastructure (no one wants to buy chips only, they want to deploy AI at scale), helped by a full-stack solution including CUDA-X."

Cantor now sees Nvidia hitting an $8 earnings per share in calendar year 2026 versus the consensus of $6.26 and $11 in 2027 compared to the $7.37 consensus.

The analysts also pointed out that token demand has skyrocketed in the last few months, which is increasing profit per token.

"OpenAI and other platforms are now generating 50-70% gross margins, leading to every stood up GPU now sold out," Muse said. "Customers are searching desperately for compute wherever they can find it. More specifically, in the last 12-16 weeks we have seen an inflection - likely tied to time-based reasoning explosion coupled with multimodal inputs, led by video where context length is super long."

Cantor is also convinced the rapid, wide-scale adoption of generative AI proves this is not a bubble.

"In the last 12 months, recommenders have adopted Generative AI," Muse noted. "Search has moved to Generative AI. Social Media to Generative AI. User-Generated content, Ad recommendation, everything has moved from classical machine learning to Generative AI. NVDA sees $2 Trillion in spending here from traditional compute to Generative AI alone. We are simply not in a bubble, rather the market is beginning to see how 'quality' AI can deliver meaningfully positive ROI's."

Cantor believes the AI infrastructure market will range from $3T to $4T by 2030.

MORE ON NVIDIA

* Nvidia: It's Difficult To Be Bearish With Nvidia's Valuation [https://seekingalpha.com/article/4828642-nvidia-its-difficult-to-be-bearish-with-nvidias-valuation]
* Wall Street Lunch: Nvidia CEO Huang Confirms Investment In Musk's XAI [https://seekingalpha.com/article/4828613-wall-street-lunch-nvidia-ceo-huang-confirms-investment-in-musks-xai]
* Nvidia: Bubble Over As OpenAI Buys GPUs From AMD [https://seekingalpha.com/article/4828594-nvidia-bubble-over-as-openai-buys-gpus-from-amd]
* Nvidia-backed AI agent startup n8n raises $180M at $2.5B valuation [https://seekingalpha.com/news/4502882-nvidia-backed-ai-agent-startup-n8n-raises-180m-at-25b-valuation]
* US approves Nvidia chip exports to UAE in bilateral AI deal: Bloomberg [https://seekingalpha.com/news/4502850-us-approves-nvidia-chip-exports-to-uae-in-bilateral-ai-deal-bloomberg]