Huo Xing Finance reports that on August 26, Bank of America maintained its "Buy" rating on NVIDIA (NVDA) with a $350 price target. The bank expects NVIDIA’s second-quarter revenue and guidance to again exceed market expectations by 3% to 4%, driven by the scale-up of Vera Rubin production. However, the bank believes the financial figures themselves are not the most critical focus of this earnings report. Bank of America stated that the market should pay closer attention to whether NVIDIA discloses multi-year, off-balance-sheet commitments made to secure chip supply, power, AI models, and customer demand. While quantifying these potential liabilities cannot fully eliminate infrastructure risks in AI, it would help the market reassess NVIDIA’s currently depressed valuation. When NVIDIA announced a $100 billion investment plan for OpenAI, corresponding to 10 GW of computing power, in September 2025, its forward EV/EBITDA multiple was approximately 27x. Since then, this multiple has declined by 44% to around 15x—less than half of AMD’s approximately 32x. Bank of America believes the current discount has already overpriced the worst-case financing scenario of about $500 billion, equivalent to 10% of enterprise value, including $150 billion to $200 billion in multi-year procurement commitments and cloud service contracts. If AI demand remains strong, NVIDIA may avoid incurring costs from idle capacity or stranded assets. Bank of America also recommends that NVIDIA increase shareholder returns. Apple returned 82% of its free cash flow to shareholders and repurchased approximately 43% of its outstanding shares between fiscal years 2013 and 2025. In comparison, the market expects NVIDIA’s free cash flow return rate for fiscal years 2027–2028 to be only around 37%. Raising this to 50%–75% could provide stronger support for the stock price. The bank expects NVIDIA to generate approximately $1 billion in free cash flow per day next year—sufficient to simultaneously fulfill ecosystem commitments and execute share buybacks.
Morgan Stanley Maintains Buy Rating on NVIDIA with $350 Target Price
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Summary
Morgan Stanley maintains its 'Buy' rating on NVIDIA with a $350 price target, citing potential 3–4% upside from Q2 results driven by Vera Rubin production. The firm highlights the need to monitor off-balance-sheet commitments in chips, power, and AI. On-chain analysis shows NVIDIA’s forward EV/EBITDA has declined to 15x from 27x in September 2025. Morgan Stanley recommends increasing free cash flow distributions to enhance shareholder returns. On-chain data indicates rising interest in NVIDIA’s long-term positioning.
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