New Nvidia Price Target After ‘Compelling’ Data on AI Infrastructure Complex

We are seeing multiple price target increases for Nvidia (NVDA) across Wall Street Thursday morning stemming from the company’s revenue and margin guidance shared during last night’s earnings call. We will join in that effort, taking our price target to $300 from $280.

Even at that new target, NVDA shares are still cheap on a price-to-earnings/growth (PEG) ratio basis. As we move through the coming quarters, we will continue to revisit our target for this One-rated position based on new information on hyperscaler and neocloud capital spending as well as monthly and quarter revenue reports from Taiwan Semiconductor (TSM), Foxconn, Dell (DELL), Hewlett Packard Enterprise (HPE) and others.

During the earnings call last night, CEO Jensen Huang discussed some interesting, if not compelling data points, which serve to keep us bullish on the AI infrastructure complex:

“With cloud industry backlog now greater than $2 trillion, CapEx by the top 5 hyperscalers is expected to reach nearly $800 billion in 2026 and $1.3 trillion in 2027.“

That does not include the neoclouds and other data center companies, which means that when we factor in their spending, overall capex levels will be even higher next year. To that end, Jensen said:

“Hyperscalers will remain a major growth driver, but non-hyperscaler growth, our AICE segment, spanning sovereign, regional NeoClouds, enterprise edge and air-gap data centers will represent roughly half of our data center business.

“In sovereign AI, our business primarily through the regional NeoClouds, grew 35% sequentially and more than tripled year-over-year in Q2.“

On the subject of Nvidia’s chip platforms, Jensen discussed the expected ramp in its Vera Rubin chipset, which should increase Nvidia’s revenue opportunity to $40 billion per gigawatt from $25 billion with Blackwell and $18 billion with Hopper:

“We commenced production shipments of Vera Rubin earlier this month, having already received purchase orders from every major hyperscaler, AI cloud and system OEM, we expect Vera Rubin to mark the fastest product ramp in NVIDIA’s history…We see Vera Rubin accounting for about 20% of data center revenue in Q3.

“Looking ahead, our preliminary expectation is for fiscal year ’28 revenue to grow approximately 70% year-over-year, although we will work to close the supply-demand gap, we expect supply to remain a bottleneck, at least through the end of fiscal year ’28… even though our demand is much greater than 70%, our supply allows us to confidently deliver 70%. And we’re going to continue to work with our supply chain to increase on that.

Nvidia expecting supply to be a “bottleneck” through at the end of fiscal 2028 supports our decision to buy more shares of Applied Materials (AMAT) earlier today.

“…going forward, we intend to increase and return excess free cash flow net of strategic uses.“

That, to us, sounds like the potential for either a divided increase, or depending on where NVDA shares are trading, an upsized buyback program. During the July 2026 quarter, Nvidia repurchased $20 billion in stock, roughly 94 million shares per the filed 10-Q, leaving ~$99 billion under the current authorization.

Connecting the Dots

Earlier, we connected a few dots between comments from Nvidia and HP Inc. (HPQ) that led us to pick up more shares of Applied Materials. Furthermore, we continue to see accelerated demand for Marvell (MRVL) and Broadcom (AVGO) as hyperscalers and neoclouds contend with capacity constraints at Nvidia and also manage overall project costs.

The capex figures and rising AI adoption and expanding usage also support our view on networking demand and what that means for Marvell, Broadcom, Nvidia and Arista Networks (ANET). Finally, we see all the above reinforcing the need for more power, and that pain point is a tailwind for Eaton (ETN).

Where Would We Pick Up NVDA Shares?

We’ll start answering that question by reminding you that NVDA shares are a One-rated position. However, as we called out this morning, odds are the moves were seeing today in NVDA are at least in part, being fueled by short-covering.

We’ll also point out that at the current share price, NVDA accounts for ~3.4% of the Portfolio’s assets, but the combination of NVDA, MRVL, and AVGO shares account for just over 10% of the Portfolio. This means that for us to make a move to add more NVDA shares, we would need to see a pronounced pullback.

For members that are underweight NVDA relative to the Portfolio, we would suggest letting the shares settle out from today’s short-covering before making a move to add. Remember too, tomorrow Fed Chair Warsh speaks at Jackson Hole.

More Pro Portfolio: (updated Aug. 27)

At the time of publication, TheStreet Pro was long AMAT, ANET, AVGO, ETN, MRVL, and NVDA.