Nvidia's Earnings Growth Ignites Hopes for $350 Price Target

Nvidia's recent earnings report has left investors stunned, yet the stock price barely budged. The company posted Q2 FY27 revenue of $96.22 billion, a staggering 105.8% year-over-year increase, with Data Center alone contributing $89.02 billion. CEO Jensen Huang emphasized that AI has reached its inflection point and is now productive and profitable.

The stock price has not kept pace with the impressive earnings growth, trading at $209.66 despite a 12.55% year-to-date gain. One concern weighing on investors is the absence of China Data Center compute revenue in the Q3 outlook, while gross margins are expected to drop from 75% to 74% and potentially bottom at 71-72% in Q4 due to climbing memory prices.

Analysts' average price target sits at $304.73, but our internal model predicts a base case of $285.68, bull case of $326.58, and bear case of $244.22. Quarterly earnings growth accelerated 214.5% year-over-year, with management guiding fiscal 2028 revenue to grow approximately 70%. If three key factors fall into place - Vera Rubin's clean ramp-up without supply chain slippage, gross margins recovering to 72-73%, and Wall Street re-rating the multiple as FY28 growth crystallizes - a price of $350 could become a reality.