HSBC analyst Frank Lee adjusted his price target for NVIDIA (NASDAQ:NVDA) stock on Sunday, lowering it from $195 to $185. Despite the downgrade, analysts maintained a “buy” rating on the stock. Mr. Lee’s assessment was based on the perspective that NVIDIA may face challenges in the first half of fiscal 2026 and needs strong performance in the second half to meet market expectations.
According to data from InvestingPro, NVIDIA achieved an impressive 152% revenue growth over the past 12 months while maintaining excellent financial health with a perfect Piotroski Score of 9.
The revision is primarily due to a downward revision to the data center revenue forecast for fiscal year 2026, which Lee now sets at $236 billion, up from the original forecast of $253 billion. This forecast is based on an expectation of 35,000 racks of AI server racks equivalent to NVL 72, down from the 41.5,000 racks previously expected. However, even with this revised forecast, HSBC’s forecast is still 28% higher than Visible Alpha’s consensus estimate of $184 billion. With a market capitalization of $3.33 trillion, NVIDIA continues to dominate the semiconductor industry.
Lee also provided insight into a bearish scenario, stating that even if NVIDIA deploys only 20,000-25,000 NVL racks in fiscal 2026, earnings per share (EPS) would still be below the consensus estimate of $4.50. % to 14% higher. HSBC’s expected EPS of $5.74 is still 28% above consensus, despite a 6% reduction in fiscal year 2026 EPS guidance to reflect slower Blackwell platform launches in the first half.
The analyst’s decision to lower the target price while maintaining the target price/earnings ratio of 32x for FY2026 reflects the revised EPS forecast. Lee’s comments highlight the pressures NVIDIA may face to deliver strong performance in line with its stated expectations for the second half of fiscal 2026.
InvestingPro’s analysis reveals over 15 additional key insights about NVIDIA’s valuation and growth outlook, available in the comprehensive Pro Research Report. The company’s next financial report is scheduled for February 26, 2025.
In other recent news, ionQ Inc CEO Peter Chapman provided an optimistic update on the timeline for delivering value for quantum computing, in contrast to recent industry skepticism.
Chapman highlighted the company’s existing and future quantum systems, including the planned release of the #AQ 64 Tempo system in 2025 and the subsequent release of the #AQ 256 system. He also outlined massive global investments in quantum computing, noting that the company will reach a $50 billion milestone by the end of 2023.
In this context, NVIDIA Corporation (NASDAQ:) received reaffirmed Buy ratings from both Truist Securities and BofA Securities. The companies cited NVIDIA’s dominant position in the artificial intelligence (AI) field and significant growth in the gaming industry. It highlighted NVIDIA’s revenue growth of 152.44% over the past 12 months, as well as its partnership with Uber (NYSE:). toyota (NYSE:) For autonomous driving.
Bernstein also maintained his Outperform rating on NVIDIA, praising the company’s impressive year-over-year revenue growth and industry-leading gross margin. Additionally, Bernstein outlined his 2025 technology strategy, recommending a market-focused stance with a slightly positive bias toward tech stocks. The company expects the relative performance of the technologies to be highly dependent on developments and awareness of AI and NVIDIA’s advances.
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