If you’re going to think that Nvidia’s price hike is a little over the top, Jefferies has brought a new dose of strength to the market that will make you think again. The investment firm has made a decision to increase its price target on Nvidia to $275 from $250, while also maintaining the Buy rating.
This act positions Nvidia in the Strong Buy category, where the optimistic view is no longer just a mood, but it has become a long-term lifestyle.
Model Stretches into 2028
Jefferies’ confidence is supported by an updated accelerator builds model that goes into 2028, as in the AI land it seems like thinking two years ahead is not long enough. That long pathway is based on the fact that Nvidia’s revenue was over $65 billion in the last year, even with the company having sold around $187 billion in total sales.
When the analysts are extending their spreadsheets out that far, it is usually a sign that they believe the demand story is not just about the hype, but it is compelling enough.
How is Nvidia “pretty cheap”?
The statement that Nvidia “remains pretty cheap” may be thought of as a joke by anyone who simply looks at the company’s current P/E ratio, which is over 46. However, the context is crucial, and Jefferies is arguing that relative to the company’s growth, the stock is trading at mid-teens multiples on a forward-looking basis.
Bringing in its PEG ratio of 0.77, and instantly the valuation story starts to sound like less of a bubble and more of a calculated premium. Even InvestingPro’s Fair Value model is indicating that Nvidia is experiencing slight undervaluation, which is the last thing you would expect to hear about a company that is dominating the news and data centers constantly.
A Familiar Pattern
Despite Jefferies predicting that there will be no much drastic changes in Nvidia’s earnings forecast compared to some of the other companies, it still sees the same cycle of earnings beats followed by increasing guidance in the near future.
To put it differently, Nvidia will not always give the market a surprise, but it is likely that it will keep gradually exceeding the expectations as if it is a routine thing for it. Broadcom is Jefferies’ top sector pick, but still Nvidia is the trustworthy source that very much fuels the vast majority of AI trade.
Competition, Tariffs, and the China Problem
It is obviously not an entirely smooth time for Nvidia in the tech sector, as they have to deal with a lot of geopolitical and competitive pressures. The pressure is mostly caused by the fact of eased but conditional export of H200 chips to China, and the possible effects of the new semiconductor tariffs.
On top of that, there is OpenAI’s multibillion-dollar partnership with Cerebras, and now Nvidia has to share its AI limelight. However, Wall Street seems to have the conviction that even with the emergence of new competitors and regulatory barriers, the company’s ecosystem power is just too strong to be displaced.
Bottom Line
Jefferies has increased its price target, but this is not so much a matter of short-term excitement, rather it is a reflection of the analyst’s long-term conviction. Nvidia is right in the middle of the AI buildout, and while competition is becoming more intense and the political situation remains unpredictable, the demand continues to move upwards.
For the time being, Nvidia is not only surfing on the AI wave, but is also, in fact, creating the wave. Also, judging by the attitude of Wall Street, the investors are still very much on the ride along.