Wall Street remains overwhelmingly bullish on NVDA
Nvidia's adjusted earnings per share for the second quarter were $2.22, more than doubling from a year ago; revenue reached $96.2 billion, a year-on-year increase of 106%.
Wedbush analyst Matt Bryson believes Nvidia's supply capacity remains the strongest in the industry, and the current constraints on shipments are primarily due to component and material supply, not insufficient end-user demand. He rates NVDA "Outperform" with a $330 price target.
Among the 61 analysts tracked by S&P Global Market Intelligence, 58 rate it a Buy or Strong Buy, 2 rate it Hold, and 1 recommends a Strong Sell. The average price target is approximately $305.41.
Bank of America analyst Vivek Arya believes Nvidia's stock price trades at a 34% to 50% discount based on a sum-of-the-parts valuation of free cash flow. His rationale is that Nvidia GPUs remain the industry standard for AI infrastructure, and the company can continue to capture a large share of global AI construction spending.
Strong Flywheel or Circular Financing?
Anurag Gurtu, co-founder of Airrived, points out that Nvidia has become a key indicator for the health of the AI economy, with its GPUs at the core of models, data centers, and AI infrastructure construction.
However, the market is beginning to focus on the "circular economy" of the AI industry: Nvidia invests in AI companies, which raise significant capital and then use those funds to purchase Nvidia GPUs and infrastructure. Capital drives infrastructure, which supports more models and startups, which in turn consume more computing power.
This could form a powerful growth flywheel but also raises a critical question: How much real economic value is ultimately generated at the end of this capital chain? The AI industry cannot rely long-term on AI companies selling products to each other. Corporate customers must ultimately justify their investment returns through productivity gains and revenue growth.
Next Phase: Shifting from Compute Power to Business Returns
The original article suggests that the massive new value added in the future cannot come solely from buying more GPUs; it must come from transforming compute power into agents, applications, and measurable business outcomes.
Nvidia's roughly $6 billion model licensing agreement with Poolside and its plan to invest $1 billion in the company at a $12 billion valuation indicate the company is further expanding from a hardware platform into an open model ecosystem. This could strengthen the Nemotron strategy and intensify its competition with OpenAI, Anthropic, and Chinese model developers.
For investors, short-term positive catalysts for NVDA come from better-than-expected earnings, strong guidance, and upward revisions of analyst price targets; medium- to long-term risks lie in whether the AI capital cycle can generate sufficient end-user revenue. If enterprise applications fail to deliver returns, the market may reassess the valuation of the entire AI infrastructure chain.
