Nvidia Dominates Market, BofA Raises EPS Projections and Price Target Amid Strong Free Cash Flow

October 19

NEW YORK, Oct. 17, 2024 With a commanding 80% to 85% share in a $400 billion total addressable market, semiconductor giant Nvidia (NVDA, Financials) keeps dominating the business, compelling BofA Securities to raise its EPS projections for the next years.

From $2.81, BofA raised its EPS projection for Nvidia’s fiscal year 2025 to $2.87; from $3.90, it raised its projection for 2026 to $4.47. Also, its 2027 projection, that is expected to jump from $5.67 from $4.72, also represents a massive bump. Apart from the EPS changes, BofA underlined its Buy recommendation on Nvidia and raised its price target from $165 to $190.

Moreover, this week, the stock has reached new highs, reflecting investors’ hope for the company’s future. Under the direction of Vivek Arya, BofA analysts underscored Nvidia’s robust free cash flow (FCF), with margins at 45% to 50%, roughly double the Mag-7 average of 23% to 25%. “In dollar terms, NVDA could take in $200 billion of FCF over the next two years, rivaling Apple (AAPL) and providing growth optionality,” Arya stated in a Thursday note to investors.

This article first appeared on GuruFocus.

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