One of the last Nvidia bears gave up and became a bull. He expects the stock to rise 80%

HSBC analyst, who has long been a "bear" on Nvidia's shares despite the general optimism on Wall Street, has dramatically changed his position. Now he advises investors to buy the company's securities and predicts them to grow by almost 80%. HSBC believes the company's prospects are excellent, thanks to the rapidly expanding AI GPU market and new contracts.

HSBC analyst Frank Lee, after being one of the few who recommended investors sell Nvidia shares, gave in and improved his rating from Hold to Buy, MarketWatch and Yahoo Finance reported. Lee also raised his target price for the company's securities from $200 to $320 - now one of the highest targets on Wall Street. He suggests the potential for the market value of the chipmaker at the center of the AI race to rise another 78% from the closing price on Oct. 14.

The main driver of Nvidia's stock growth, according to HSBC, will be the expansion of the market for graphics processing units (GPUs) for artificial intelligence through fiscal 2027. According to the analyst, this market covers an increasingly wide range of customers - not only cloud services, but also companies from other sectors that are actively increasing spending on AI infrastructure.

"Our analysis shows that Nvidia's recent AI deals create potential GPU revenue opportunities in the $251-400 billion range from Stargate and OpenAI projects alone, which could double our [baseline] FY 2027 data center revenue forecast of $351 billion," Lee noted.

An additional driver of Nvidia's stock growth will be TSMC's CoWoS (chip-on-wafer-on-substrate) technology, which is considered one of the key technologies in the production of advanced AI chips, HSBC believes. Nvidia uses it and could get more of TSMC's production capacity. The analyst estimates that the expansion of CoWoS quotas will lead to an increase in Nvidia's revenue forecasts in the data center segment beyond current market expectations. In a bullish scenario, HSBC forecasts Nvidia's data center revenue to grow to $390 billion by 2027, up from $253 billion in the FactSet consensus.

In addition, HSBC does not put a cross on Nvidia's Chinese market. He believes that Beijing's restrictions on Nvidia's GPU supply may be partially lifted after a possible trade agreement between the U.S. and China in the first quarter of 2026, which will allow the company to regain its position in this market. Beijing is unlikely to achieve full technological independence in the next one or two years, the analyst said. According to HSBC's assessment, China does not yet have sufficient production capacity and a comparable level of technological development to meet demand for advanced AI chips with the help of local competitors Nvidia alone.

Even excluding a possible rebound in chip exports to China, HSBC raised Nvidia's fiscal 2027 earnings forecast to $8.75 per share, while the FactSet consensus is only $6.46.

It was also revealed on Wednesday that Nvidia has been awarded a major new contract by UK data center operator Nscale, which will supply around 200,000 Nvidia AI processors to Microsoft in Europe and the US with Dell Technologies. In the largest project, Nscale will install 104,000 Nvidia GB300 GPUs at its Texas campus by the third quarter of 2026, and will also build data centers in Norway, Portugal and the UK.

Nvidia is also involved in the $40 billion acquisition of Aligned Data Centers, which is being pursued by the Artificial Intelligence Infrastructure Partnership (AIP) consortium along with BlackRock, Microsoft and MGX. The deal is expected to close in the first half of 2026.

In trading on October 15, Nvidia shares initially jumped almost 3% to $184.9, but then lost all the growth and went into negative territory before recovering the losses and returning to a slight increase. Since the beginning of the year, the company's market value is up 35%. By comparison, the main US stock index S&P 500 has added about 13.5% over the same period.

The vast majority of analysts - 59 out of 66 - advise investors to buy Nvidia stock, assigning Buy and Overweight ratings. Another six recommend Hold, and one recommends Sell. Wall Street's consensus target price of $221.4 implies the company's market value is up another 23% from its last close.

This article was AI-translated and verified by a human editor