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After a rough day for its shares, which saw the stock tumble by more than 5%, NVIDIA is in for some optimism in a fresh note released by Jefferies. Jefferies increased NVIDIA's share price target to $150 from $135 in an analyst note released yesterday as it kept a Buy rating on the shares. The share price target upgrade is based on an Asian tour made by Jefferies' analysts in May that led them to believe that NVIDIA might capture even more of the multi trillion dollar AI market than expected since it had asked for a 25% capacity increase for products based on the Blackwell micro architecture.
NVIDIA's Share Price Target Upgraded By Jefferies On Back Of Updated Estimates For Blackwell GPU Racks
The latest bout of optimism for Jefferies on NVIDIA's shares comes after analysts upgraded their estimates for the firm's GPU racks after working with the Taiwan based Fubon Financial. In their note, they shared that during an Asian tour in May that looked at NVIDIA's supply chain, they discovered that the firm had asked for a 25% increase in supply chain capacity for its Blackwell GPUs. Blackwell is NVIDIA's latest micro architecture and the chips are manufactured by Taiwan's TSMC on the N4 semiconductor manufacturing technology.
NVIDIA also sells stacks of its GB200 Blackwell GPUs in racks. These are called the GB200 NVL72 and GB200 NVL36, and each of these features 72 or 36 GB200 GPUs that are connected to a CPU with NVIDIA's NVL interconnect. After the May tour and the purported upgraded Blackwell capacity request, Jefferies sought to further investigate the impact that this capacity growth would have had on the GB200 NVL platform.
Jefferies' latest analysis, conducted with help from Fubon analyst Sherman Shang, has now led the firm to increase its volume estimates for the GB200 NVL platform. The previous estimates had sat at 40,000 units for the GB200 NVL72 and NVL36 platforms. Now, after Jefferies upgraded the estimates for GB200 NVL36 from the earlier 30,000 to 50,000, the combined estimate has grown to 60,000 units. The new estimates suggest that customers in the AI industry are focusing on cost efficiency and mid scale AI processing since the NVL36 platform houses half the number of GPUs as the larger platform.
The analysts also commented on NVIDIA's prospects for 2025. The firm has stunned Wall Street by not only growing its revenue consistently in triple digit percentages, but by also regularly beating analyst estimates. Jefferies believes that the best is yet to come, as it expects Blackwell to power even more beats in the firm's fiscal year 2026.
Talking numbers, Jefferies' latest fiscal year 2025 and 2026 revenue estimates for NVIDIA sit at $124 billion and $121 billion, respectively. The earnings per share estimates are $2.82 for fiscal year 2025 and $4.23 for fiscal year 2026.
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