BofA Lifts Nvidia Target to $350 on ‘Unprecedented’ Agentic AI Wave

Bank of America raised its price target on Nvidia Corp. to $350 from $320, citing an “unprecedented wave of demand” for semiconductors driven by the shift from simple chatbots to more complex agentic AI applications. The call suggests a potential 57% upside from the stock's current price of around $223.

"What we are seeing is kind of this unprecedented wave of demand for semiconductors because of generative AI," Bank of America analyst Vivek Arya said in a CNBC appearance. "What was simply chat bots have now moved to the next stage, which is agentic applications. These are multi-step autonomous applications."

The upgrade follows Nvidia’s record first-quarter earnings, where revenue jumped 85% year-over-year to $81.6 billion, beating consensus estimates by more than $2.5 billion. The company’s data center revenue alone hit $75.2 billion, up 92% from the prior year, reflecting massive investments from cloud providers and enterprises. To underscore its financial strength, Nvidia also boosted its quarterly dividend by nearly 25 times to $0.25 per share.

Arya’s call reframes the AI trade around a structural shift in computing demand, suggesting the rally has legs even as Nvidia’s market cap tops $5.5 trillion. The bank now models a total AI market reaching over $3 trillion by 2030, with Nvidia positioned to hold nearly 80% of the critical accelerator market.

The Agentic AI Thesis

The core of the bull case is the move from chatbots, which answer single questions, to AI agents that can execute complex, multi-step tasks. As Nvidia CEO Jensen Huang noted on the company's recent earnings call, "Agentic AI has arrived, doing productive work, generating real value and scaling rapidly." Each step an agent takes consumes GPU-powered tokens, leading to exponential growth in compute demand.

This dynamic is creating a direct correlation between infrastructure investment and corporate growth, forcing companies to spend heavily on data centers or risk falling behind. Nvidia’s balance sheet reflects this demand, with the company sitting on $119 billion in supply-related commitments and $145 billion in customer purchase commitments.

Unpacking the $350 Target

Bank of America's valuation doesn't rely on multiple expansion. Instead, it hinges on pure earnings growth, which Arya projects could be 50% to 60%. The bank raised its fiscal year 2027 earnings per share estimate by 9% to $9.09 and its 2028 estimate by 15% to $13.27. At a forward price-to-earnings ratio of about 24x, the case rests on Nvidia continuing its current trajectory.

The bank also highlighted a new $200 billion market opportunity for Nvidia's Vera CPUs, processors designed for AI agents. Nvidia has stated it has visibility into nearly $20 billion in CPU revenue this year alone.

The Supply Squeeze Spreads

The intense demand for Nvidia's chips is lifting the entire semiconductor ecosystem. Advanced Micro Devices Inc. (AMD) has seen its stock climb 109% year-to-date on momentum for its own AI accelerators. Broadcom Inc. (AVGO) reported AI semiconductor revenue of $8.4 billion, up 106% year-over-year, and guided for $10.7 billion next quarter. Even equipment makers like Lam Research Corp. (LRCX) are posting record revenues as supply constraints benefit the whole bill of materials.

Intel Corp. is also gaining, up 204% year-to-date on its foundry turnaround story. While Arya believes Intel needs two to four years to catch up to Taiwan Semiconductor Manufacturing Co. on process technology, a recent design win for its Xeon 6 CPU in Nvidia's DGX Rubin systems shows a potential path forward.

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