HSBC Global Research analyst Frank Lee sees significant long-term potential in Nvidia, maintaining a Buy rating on the stock and raising the price target to $1,350, representing a roughly 50% increase. This bullish outlook stems from Nvidia's strong pricing power, particularly in its server rack systems and GB200 platform.
Lee acknowledges that his previous estimates for Nvidia's growth may have been too conservative. He now projects the company to achieve fiscal-year 2026 revenue of $196 billion based on robust server rack pricing and unit sales assumptions.
However, there are some near-term uncertainties. While Lee expects Nvidia to surpass earnings expectations when it reports in May, he anticipates limited upside in the next two quarters due to potential product transition challenges.
Overall, HSBC's Buy rating and increased price target reflect their confidence in Nvidia's ability to navigate these transitions and maintain its growth trajectory. Lee believes the market hasn't fully priced in the significant upside potential for Nvidia's earnings in fiscal year 2026.