Wedbush Securities has raised its price target on Nvidia Corp (NASDAQ:NVDA, XETRA:NVD) to $345 from $330 and kept an outperform rating, after the US chipmaker beat forecasts and issued its first full-year outlook.
Second-quarter revenue of $96.2 billion, up 106% year on year, and adjusted earnings of $2.22 a share both topped consensus estimates of $92.2 billion and $2.10.
The beat of $5.2 billion against the guided mid-point was larger than in each of the previous three quarters, the broker noted.
Data centre sales, its largest business, reached a record $89 billion, up 117% year on year, and made up 93% of the total.
Nvidia guided to third-quarter revenue of $108 billion, plus or minus 2%, around $4 billion ahead of Wall Street's consensus forecast.
A year of visibility
For the first time, management forecast revenue growth of around 70% in the financial year to January 2028, a year still five months away.
Nvidia said cloud industry backlog now tops $2 trillion, with capital spending at the five biggest hyperscalers on course to near $800 billion this year.
Management said that outlook was constrained by supply, with customer forecasts pointing to demand roughly doubling.
Chief executive Jensen Huang framed unconstrained demand as capable of supporting close to 100% growth, against the 70% Nvidia can actually supply.
The company expects supply to remain a bottleneck at least until the end of the January 2028 financial year.
Memory costs bite
Nvidia warned that gross margins would slip to 74% this quarter, trough at 71% to 72%, then settle at 72% to 73% next year.
Management described pricing conditions in memory chips as extreme, adding that increases had exceeded its own expectations and would climb further.
Wedbush analyst Matt Bryson said he had not expected margins to dip this year, but argued higher revenue mattered more, raising his 2028 earnings estimate to $15.53 from $12.06.
Supply commitments swell
Supply and capacity commitments jumped to $279 billion from $119 billion, driven mainly by fresh memory agreements, with $92 billion falling due this year.
Higher memory costs should benefit suppliers, Bryson added, and SK Hynix in particular, given its larger share of Nvidia's high-bandwidth memory.
Amazon Web Services committed to a further 2 million graphics processors from this quarter through to mid-2028, alongside Nvidia's Vera central processors.
The company also disclosed guarantees of up to $105 billion tied to an Ohio data centre campus that will host only Nvidia chips for OpenAI under 20-year leases.
Production shipments of the new Vera Rubin platform began this month, which Nvidia expects to become the fastest product ramp in its history.
Bryson's target values Nvidia at about 22 times his 2028 earnings estimate plus net cash, well below the 40 times its shares commanded during the last sustained data centre boom.
450 words. The note prices off $209.66, which puts the new target at roughly 65% upside; say the word if you want the live share price and that upside worked into the intro.