Nvidia's AI Expansion Could Push Revenue To $300 Billion By 2026, Analyst Says

Cantor Fitzgerald analyst C.J. Muse raised Nvidia's price target to $240, maintaining an Overweight rating, citing robust Blackwell-driven Data Center expansion and surging AI demand. Muse projects Nvidia will significantly surpass consensus estimates for Q2 and Q3 revenues, forecasting $48 billion and $55 billion respectively, driven by accelerating hyperscaler capital expenditures and a $1.5 trillion global sovereign AI investment pipeline. He further anticipates Data Center revenue reaching $200 billion in CY25 and $300 billion in CY26, well above current Street forecasts, underscoring Nvidia's sustained leadership in AI infrastructure.

Analysis

Cantor Fitzgerald analyst C.J. Muse has issued a highly bullish outlook on Nvidia (NVDA), raising the price target to $240 while maintaining an Overweight rating. The thesis is anchored in the belief that Nvidia will continue to significantly outperform consensus expectations, driven by its Data Center segment and the rollout of the new Blackwell architecture. The analyst projects Q2 revenue of $48 billion and Q3 revenue of $55 billion, figures that are notably above the respective consensus estimates of $45.8 billion and $52.6 billion. This anticipated outperformance is attributed to accelerating hyperscaler capital expenditures, which are forecast to grow 57% in calendar 2025, a substantial $1.5 trillion global sovereign AI investment pipeline, and increasing enterprise adoption. The long-term view is even more aggressive, with Data Center revenue modeled at $300 billion by calendar 2026, far exceeding the current Street forecast of $235 billion, and projected earnings power reaching $8.00 per share. While acknowledging headwinds from U.S. export restrictions to China, the analysis suggests these are already factored into most sell-side models, positioning any approved H20 GPU shipments as a source of potential upside. Furthermore, gross margins are expected to expand into the mid-70% range by late 2025, supported by the product mix shifting towards higher-value Blackwell products.

Key Decisions for Investors

• Investors should consider that the analyst's revenue and EPS forecasts through 2026 are substantially above current consensus, suggesting that the market may be underestimating Nvidia's medium-term growth trajectory.
• Monitor the upcoming Q2 earnings report on August 27 closely, with particular attention on Data Center revenue relative to the analyst's $42.9 billion forecast and management's guidance on the Blackwell product ramp.
• Factor in the potential for margin expansion to the mid-70% range by late 2025, as this could provide a significant boost to profitability beyond top-line growth.
• Treat the China export restriction issue as a potential source of upside surprise, as the analyst's base case appears to exclude this revenue, meaning any approved shipments could serve as an unexpected positive catalyst.