Nvidia (NVDA) just posted another banger earnings report on Aug. 26, blowing past Wall Street’s expectations as sales more than doubled and adjusted profit handily cleared estimates.
Then Raymond James raised the temperature further when the firm’s 5-star analyst Simon Leopold dropped an eye-popping new Nvidia price target, which is comfortably above other major Wall Street forecasts.
Investors responded with force post earnings, as, per Bloomberg, Nvidia stock jumped 8.7% the following session to $227.9. This added $442 billion in market value, while finishing just below its record close after another punishing choppy stretch.
Moreover, it’s important to note that Leopold’s call lands after Nvidia stock has gained nearly 21% year to date and around 8% over the past three months, according to Seeking Alpha, despite concerns that AI spending, competition, and elevated memory costs might slow the company’s momentum.
Leopold believes Wall Street is still underestimating Nvidia’s massive scale and sees supply, rather than customer demand, as arguably the biggest obstacle ahead.
Nvidia’s $515 target towers over the rest of Wall Street
According to TheFly, Raymond James analyst Leopold bumped its price target to a Wall Street high of $515 from $352, a massive 46% increase, while reiterating a Strong Buy rating.
Using Nvidia’s latest closing price of $227.98, the target implies 126% upside. More strikingly, it values Nvidia at $12.4 trillion, assuming share count remains broadly unchanged.
That’s over twice the company’s current $5.49 trillion market capitalization.
What’s interesting is that Leopold’s call is remarkably aggressive even within an overwhelmingly bullish analyst community.
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Wall Street’s consensus is at $322.95, with forecasting ranging from $180 to $515. Leopold’s target is over 50% higher than the consensus target.
JPMorgan, Citi, Morgan Stanley, and UBS all bumped their targets following the report, but none came remotely close to Raymond James. Even Evercore’s exceptionally high $465 forecast is 10.8% below Leopold’s call.
Here’s a list of major bank analysts’ ratings following the earnings report:
- Raymond James: $515 price target, implying 125.9% upside.
- Evercore ISI: $465 price target, implying 104% upside.
- Bernstein: $400 price target, implying 75.5% upside.
- JPMorgan: $320 price target, implying 40.4% upside.
- Citi: $315 price target, implying 38.2% upside.
- Morgan Stanley: $300 price target, implying 31.6% upside.
- Source: MarketScreener.
Clearly, the difference isn’t simply a more generous valuation multiple. Leopold is modeling an earnings and sales trajectory that’s comfortably higher than Wall Street’s current assumptions.
Why Simon Leopold sees $1T in Nvidia revenue
At the core of Leopold’s argument is that for Nvidia, the problem isn’t demand; it’s actually supply.
Nvidia’s fiscal Q2 sales skyrocketed 106% to $96.2 billion, exceeding Leopold’s $92.3 billion estimate. Moreover, adjusted earnings climbed 120% to $2.22 per share, while data center revenue leapt up 117% to $89 billion, representing 92.5% of total sales.
The outlook was perhaps more consequential.
Nvidia guided for $108 billion in October-quarter sales, topping Wall Street’s $104.86 billion expectation, and projected 70% revenue growth for fiscal 2028.
Analysts had modeled only 44% to 45%, and management indicated demand might support growth closer to 100%, but memory shortages and other components continue constricting shipments.
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Jensen Huang summarized that shift directly:
“AI has reached its inflection point. It’s doing useful work. Its tokens are productive and profitable. Now, compute is revenue.”
He also talked about the immediate obstacle: “Our entire supply chain is challenged.”
For Leopold, that constraint is linked to deferred sales instead of weakening interest. If Nvidia can continue to secure more memory, packaging, networking equipment, and manufacturing capacity, it will convert the lion’s share of existing demand into sales.
He believes that dynamic may eventually push annual sales toward $1 trillion by January 2029, over 33% above FactSet’s consensus of just under $750 billion.
Vera Rubin strengthens that argument even more.
The platform entered production with massive orders from every major hyperscaler and AI cloud provider. On top of that, Nvidia expects Rubin to generate nearly 20% of data-center revenue this quarter. Moreover, its Vera server CPU is scaling quick, with orders pointing to a $20 billion run rate and sales expected to more than double in fiscal 2028.
Additionally, Leopold expects non-hyperscaler sales to grow faster than hyperscaler sales, broadening Nvidia’s growth beyond Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOGL), and Meta (META) to AI laboratories, enterprises, and specialized clouds.
Nvidia’s $515 target demands near-perfect execution
Raymond James’ $515 target is best described as a bull case, not a price that investors might chase after Nvidia’s post-earnings bump.
Leopold is applying a 22-times multiple to his calendar 2028 earnings estimate, which implies $23.41 in earnings per share. At Nvidia’s current price, the stock trades at around 9.7 times that distant estimate, which makes it attractive if those forecasts prove accurate. However, small changes in either assumption could dramatically alter the valuation.
If 2028 earnings fall 20% short and investors apply an 18-times multiple, the resulting value drops to around $337, a lot closer to Wall Street’s consensus target.
Several risks could lead to that outcome.
Nvidia made a whopping $279 billion in supply and capacity commitments in securing scarce components, according to WSJ reporting.
Those commitments might support growth as demand remains strong but might become burdensome if AI infrastructure spending slows down. Rising memory costs are expected to push gross margin from 75% toward 71% to 72% before a potential recovery next year.
Moreover, it’s important to note that Nvidia is an investor, supplier, and financial backstop for its own ecosystem. Its guarantees include more than $105 billion connected to SB Energy, per Reuters, and an OpenAI data center project, along with $3.5 billion of maximum exposure linked to other AI-cloud leases.
These arrangements can deepen customer loyalty but also blur the distinction between independent demand and demand backed by Nvidia’s balance sheet.
Other risks include one customer representing a sizable 16% of quarterly sales, growing competition from AMD and hyperscalers’ custom chips, and an October-quarter outlook that includes no data-center sales in China.
Existing shareholders can still reasonably maintain a core position but should avoid allowing the massive price target to justify the excessive concentration. New investors might be better served building exposure gradually, and tracking assumptions behind Leopold’s strong model
The key markers will be Vera Rubin reaching nearly 20% of near-term data-center sales, fiscal 2028 growth remaining around 70%, gross margins stabilizing over 72%, and supply availability improving and non-hyperscaler growth remaining robust without increasingly aggressive financing.
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