TLDR
- BMO Capital initiated Nvidia with an Outperform rating and a $340 price target
- Nvidia named “top pick” among a broad group of semiconductor stocks
- BMO cited Nvidia’s full-stack AI hardware and software dominance as key strengths
- Demand is strong with capacity sold out for the next 12-plus months
- Broadcom, AMD, Marvell, and Semtech also received Outperform ratings from BMO
Nvidia is trading at $216.18 as of Thursday, down 0.31% on the day, even as BMO Capital initiated coverage with an Outperform rating and a Street-bullish $340 price target.
BMO analyst Harsh Kumar named Nvidia the “top pick” among a wide group of semiconductor and quantum computing stocks the firm kicked off coverage on Thursday.
Kumar pointed to Nvidia’s full-stack combination of hardware and software as the core reason for the top billing. The firm sees a “defensible end-to-end HW/SW moat” that it believes the market is currently underpricing.
The stock trades at 18x forward P/E, which BMO views as a discount given its model projecting revenue growth of 84% in FY27 and 50% in FY28.
BMO also flagged Nvidia’s next-gen Vera Rubin NVL72 system, which is expected to ramp in the second half of the year, as a key upcoming catalyst.
Demand continues to run hot. BMO noted that much of Nvidia’s production capacity is already sold out for the next 12 or more months.
Nvidia posted a gross profit margin of 74% and revenue growth of 71% over the last twelve months. It carries a P/E ratio of 33.2.
Other Analysts Stay Bullish Ahead of Earnings
The BMO note adds to a growing pile of positive calls. Oppenheimer holds an Outperform rating with a $265 price target, citing Blackwell Ultra and VR200 developments.
Stifel has a Buy rating and a $282 target, expecting Nvidia to beat earnings estimates and raise guidance. TD Cowen also holds a Buy with a $275 price target.
Nvidia is set to report its second-quarter earnings soon, which will be a key test for whether those bullish calls hold up.
BMO Also Bullish on Broadcom, AMD, Marvell
BMO spread its optimism across the semiconductor space. Broadcom received an Outperform rating and a $455 price target, with BMO calling it the number two AI supplier behind Nvidia, driven by custom ASIC and networking.
AMD got an Outperform and a $550 target. BMO noted AMD’s Helios rack system has three lead customers in OpenAI, Meta, and Anthropic.
Marvell picked up an Outperform and a $250 target. Semtech was also rated Outperform with a $155 target.
In analog, BMO rated Analog Devices, Impinj, and Microchip Technology all Outperform, with targets of $430, $220, and $95, respectively. The firm said analog names are emerging from a post-COVID correction, pointing to improving PMI, cleared channel inventory, and rising backlogs.
D-Wave also received an Outperform rating and a $35 price target in the quantum computing space.
InvestingPro data currently flags Nvidia as undervalued based on its Fair Value analysis, placing it on the platform’s most undervalued stocks list. Moody’s rates Nvidia Aa1 with a positive outlook, and S&P holds an AA issuer credit rating, both affirmed following Nvidia’s $105 billion commitment to an AI data center campus in Pike County, Ohio.
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