Wells Fargo said Nvidia is expanding beyond its traditional role as an AI chip supplier and playing a “much bigger game.”
- Bank of America reiterated a ‘Buy’ rating and $350 price target, while Wells Fargo maintained an ‘Overweight’ rating and $315 target.
- BofA said the new structure could shift the financing burden away from Nvidia’s balance sheet.
- Wells Fargo said Nvidia could use the platform to help finance entire “AI Factories.”
Wall Street is turning bullish on Jensen Huang-led Nvidia (NVDA) after the company announced a new $500 billion artificial intelligence (AI) infrastructure financing partnership with six top financiers – Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR.
According to the Bank of America (BofA), which reiterated a ‘Buy’ rating alongside a $350 price target on NVDA stock, the deal will free up cash flow that can be “better directed to a stock that trades at a significantly depressed valuation.” Meanwhile, Wells Fargo said the deal showed that Nvidia is “playing a much bigger game.”
NVDA stock gained over 1% in pre-market trade after a drop of 2.8% in the previous session. Cathie Wood’s ARK Invest bought the dip, adding a stake across five of its funds.
BofA Sees Nvidia Freeing Up Cash Flow
The firm said that the new funding is structured in a way that the “burden sits with the consortium, not NVDA’s balance sheet,” in a note cited by TheFly. The financing partnership could therefore give Nvidia more flexibility to deploy its cash while still supporting the rapid expansion of AI infrastructure.
BofA said the deal appeared to be a pivot away from vendor-financing, and expects more clarity on the shift during Nvidia’s earnings call at the end of the month.
Wells Fargo Sees Nvidia Playing A Bigger Role
“We see this as yet another example of how NVDA is playing a much bigger game,” Well Fargo said in its note to investors, cited by StreetInsider. The firm reiterated an ‘Overweight’ rating on NVDA stock with a price target of $315.
The firm said Nvidia is moving beyond its traditional role as an AI chip supplier and increasingly helping finance entire “AI Factories.” That could expand the company’s role across the AI infrastructure ecosystem and potentially support a larger recurring revenue opportunity over time.
How Is Retail Feeling About NVDA’s New $500B Deal?
On Stocktwits, retail sentiment around Nvidia shares trended in ‘bullish’ territory over the past day and chatter increased to ‘high’ from ‘normal’ levels.
One retail investor said that Wall Street just gave Nvidia the “biggest credit card in history,” while another said that the deal was “no joke” and the stock is on track to hit a 52-week high of over $236.
BofA’s $350 price target implies roughly 61% upside from Nvidia’s closing price on Monday, while Wells Fargo’s $315 target implies about 45% upside. The Koyfin analyst average of $302 represents roughly 39% potential upside.
NVDA stock has gained oer 14% this year and around 20% in the last 12 months.
Read also: ARK Is Buying The AI Dip: Cathie Wood Adds NVDA Across Five Funds, Buys NET, AVGO Stocks Too
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