SemiAnalysis sees Nvidia data center revenue 20% above Wall Street views

SemiAnalysis, the semiconductor research firm that AI hardware investors track closely, projects Nvidia's data center compute revenue at roughly $203 billion for the second half of fiscal 2027, about 20% above the $169 billion Wall Street consensus.

"The upside is driven by a large Rubin ramp after earlier HBM4 issues that are now resolved, combined with front-end wafer supply that has been built up," the SemiAnalysis team wrote in a note to clients.

The estimate draws on supply-chain data including wafer starts, HBM availability, server integrator shipments and hyperscaler build plans — a more granular approach than sell-side models that rely on company guidance. Nvidia's data center segment generated $75.2 billion last quarter, up 92% year over year, split between compute revenue of $60.4 billion and networking at $14.8 billion. The company has locked in $119 billion in total supply-related commitments and $30 billion in multi-year cloud service agreements.

If SemiAnalysis is correct, the sell-side models underpinning Nvidia's valuation are materially low on the company's largest business unit. Nvidia shares closed at $204.12 on July 8, up 3.65%, and prediction markets on Polymarket assign an 83% probability the stock closes July above $208.

The Kyber Question

SemiAnalysis also flagged that Nvidia's Kyber NVL144 rack-scale system may slip from 2027 to 2028 due to a PCB midplane manufacturing challenge — a claim Nvidia disputed, saying its roadmap remains intact. The debate concerns a 2028 product, while the bullish revenue call covers the second-half FY2027 ramp already in flight, so the two threads do not collide.

Valuation Cushion

Nvidia trades at roughly 31 times trailing earnings, a discount to the iShares Semiconductor ETF's 40 times multiple, giving the stock a valuation cushion as the Vera Rubin earnings growth cycle approaches. The company has posted 12 straight earnings-per-share beats and generated $48.5 billion in free cash flow last quarter. Analysts have a 12-month price target of $309.33, implying roughly 57% upside from current levels.

Supply-chain data underpinning the SemiAnalysis projection points to stronger-than-expected demand for Nvidia's next-generation AI hardware. Investors will watch Nvidia's next earnings report on Aug. 26 for official guidance that could confirm or refute the bullish thesis.

This article is for informational purposes only and does not constitute investment advice.