Nvidia (NVDA) inventory has gained about 32% over the previous yr, on the time of writing, Tuesday afternoon, Feb. 17, in response to Yahoo Finance. In the meantime, the SPDR S&P 500 index (SPY) is up about 11% in the identical interval.
It’s spectacular that Nvidia has outpaced the S&P 500 by greater than 20%, however much more so after we take a look at different members of the Magnificent 7:
- Meta is 13% down in the identical interval.
- Amazon is down 12%.
- Microsoft is down nearly 3%.
- Apple is simply up a bit greater than 7%.
- Tesla is up 14%.
The one exception, a Magazine 7 member that fared higher than Nvidia, is Google, which is 62% up in the identical interval.
Hyperscalers have introduced large capital expenditures (capex) for this yr. I’ve lined Amazon earnings and capex outlook right here, and Meta’s earnings and capex outlook right here. Nvidia will launch its This autumn earnings on February 25.
Financial institution of America analyst Vivek Arya and his workforce up to date their cloud capex outlook, AI information middle complete addressable market estimates, and revised forecast for Nvidia forward of earnings.
To refresh your reminiscence on how Nvidia Q3 earnings appeared, learn my article “Goldman Sachs, JPMorgan and BofA drop verdicts on Nvidia earnings.”
Nvidia’s outlook for This autumn 2026:
- Income is anticipated to be $65.0 billion, plus or minus 2%.
- GAAP gross margins are anticipated to be 74.8% plus or minus 0.5%.
- GAAP working bills are anticipated to be roughly $6.7 billion.
Financial institution of America raised EPS estimates for Nvidia.
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Financial institution of America raises the whole addressable marketplace for AI information facilities
Arya and his workforce imagine that capital expenditures for 2026 and 2027 will attain $748 billion and $869 billion, respectively. These numbers signify year-over-year progress of 56% and 16%, respectively.
Given this exceptionally sturdy 2026 cloud capex outlook, the workforce has now up to date its 2030 AI information middle programs complete addressable market estimate to roughly $1.4 trillion, up from the prior estimate of $1.2 trillion.
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Analysts count on the general information middle programs complete addressable market to speed up in 2026, rising by 64% YoY, with AI programs rising even quicker at roughly 100% YoY, pushed by new AI accelerator deployments.
The workforce expects that AI accelerator distributors will usually cross on their rising HBM/DDR prices to clients, sustaining margins as scale and system gross sales improve.
Analysts mentioned that even after excluding Google because of its reliance by itself TPUs, 2026 cloud capex is anticipated to extend roughly 45% YoY, to $180 billion.
Assuming two-thirds of this spending will go towards servers, analysts estimate a rise of roughly $120 billion in potential compute chip gross sales this yr, which is consistent with their new Nvidia outlook of a $110 billion improve in information middle compute gross sales.
The workforce added that the remaining $10 billion to $20 billion of gross sales might be cut up throughout AMD and non-TPU ASICs.
Financial institution of America raises EPS estimates for Nvidia
Analysts raised their gross sales estimates for Nvidia for fiscal years 2027, 2028, and 2029 by +7%/+2%/+2% to $342.33 billion/$422.75 billion/$496.3 billion, and raised EPS estimates by +8%/+3%/+3% to $8/$9.98/$11.94.
The workforce mentioned that Google’s Gemini 3 Professional AI mannequin, which was skilled on Google’s customized TPU v7 Ironwood chips co-designed with Broadcom, could also be one of the best AI mannequin for now, however that it might quickly change with Blackwell-trained LLMs.
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They famous that each one GPU-based fashions in the marketplace in the present day had been skilled on older-generation Nvidia Hopper GPUs, besides Grok-4. Nonetheless, even Grok-4 was largely skilled on older Nvidia chips, as xAI’s Collosus cluster, on which it was skilled, consists of 150,000 H100, 50,000 H200, and solely 30,000 Blackwell chips, B200/GB200.
The workforce expects any Blackwell-majority-trained LLMs to “rewrite the reasoning/coding benchmarks” as soon as broadly obtainable in early 2026.
In a analysis be aware shared with me, Arya reiterated a purchase ranking for Nvidia inventory and the goal value of $275, primarily based on 28 a number of his estimate for price-to-earnings ratio excluding money for calendar yr 2027, which is inside Nvidia’s historic ahead yr price-to-earnings vary of 25 to 56.
Analysts famous draw back danger components for Nvidia:
- Weak spot in consumer-driven gaming market
- Competitors with main public corporations
- Bigger-than-expected influence from restrictions on compute shipments to China
- Lumpy and unpredictable gross sales in new enterprise, information middle, and autos
markets - Potential for decelerating capital returns
- Enhanced authorities scrutiny of Nvidia’s dominant market place in AI
chips
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