BofA Securities raises Nvidia stock price target to $220 on China sales analysis

Nvidia (NVDA) shares advanced following BofA Securities' price target increase to $220 from $180, driven by the anticipated resumption of H20 GPU sales in China and new compliant processor announcements. Analysts project significant earnings accretion, with BofA estimating 5-7% EPS growth for FY26/27 from a projected $4-6 billion quarterly China shipment run-rate, which could unlock substantial near-term revenue from previously written-down inventory. While the move capitalizes on a projected $50 billion China market opportunity, some analysts advise caution on its full impact given expected market share declines for China's AI accelerator market.

Analysis

A consensus of analyst upgrades, led by BofA Securities raising its price target on Nvidia to $220, is driven by the anticipated resumption of H20 GPU sales to China. BofA's model projects a material impact, forecasting a $4-6 billion quarterly shipment run-rate to China in the second half of 2025, which could generate 5% and 7% earnings per share accretion for fiscal years 2026 and 2027, respectively. This outlook is supported by other firms, including William Blair, which projects an additional $0.30 in EPS for fiscal 2026. The near-term potential is significant, with an opportunity to unlock approximately $10 billion in revenue from previously written-down inventory. However, this optimism is tempered by long-term strategic risks; analysts expect China's contribution to the global AI accelerator market to decline from 14% in 2025 to 12% in 2026 and eventually 5-10% due to U.S. restrictions and rising local competition. While the company exhibits exceptional fundamentals, including 86.17% revenue growth over the last twelve months and a strong Financial Health Score of 3.9, valuation remains a key consideration, as the stock trades near its 52-week high and is noted as potentially trading above its Fair Value.

Key Decisions for Investors

• The strong consensus of analyst upgrades and quantifiable EPS accretion of 5-7% for FY26/27 from renewed China sales present a clear catalyst for bullish positions, though valuation at a 37x forward P/E multiple warrants consideration.
• Investors should closely monitor the trajectory of China-related revenues and market share, as projections indicate a decline from 14% of the global AI accelerator market in 2025 due to rising local competition and persistent U.S. restrictions.
• Given the stock is trading near its 52-week high and is potentially above its intrinsic fair value, investors initiating new positions should carefully evaluate their entry point or consider phasing in to mitigate valuation risk despite strong fundamental momentum.