KeyBanc Raises Nvidia Stock Target to $250 Amid CoWoS Expansion and AI Demand Surge

Nvidia remains in the spotlight as KeyBanc Capital Markets increased its price target for the stock to $250 from $230, along with giving it an Overweight rating. This is as Nvidia hits its 52-week high of $184.55 with an impressive market capitalization of $4.42 trillion, which emphasizes the strength of the company’s financials and market leadership in the AI chip space. 

Nvidia has provided 71.55% growth in revenue in the last one year, and it stands as the biggest name in the sector of progressive semiconductors, as per the data from InvestingPro.

Expansion of CoWoS

The most important driving force for KeyBanc’s upward revision is Nvidia’s aggressive expansion in CoWoS (Chip-on-Wafer-on-Substrate) technology. The firm upgraded its 2024 demand forecast for CoWoS to 370,000 interposers, representing over 90% growth from a year ago. 

In the future, Nvidia projects 530,000 interposers for 2025, which is a 40% year over year increase and a 10% greater capacity than previously projected. This supply upgrade also highlights Nvidia’s capacity to catch up with the soaring demand for AI, and also enhances its position as a leader at next-generation chip packaging.

Manufacturing & Technology Advancements

Along with the capacity expansion, KeyBanc pointed towards enhanced yields in Nvidia’s GB rack manufacturing, which have now climbed above 85%. These efficiencies enable the company to deliver approximately 30,000 racks in 2024 and expand to at least 50,000 racks by 2026, which sustains the extensive buildout of global AI infrastructure. 

Nvidia is also optimizing its product specifications with the VR200 NVL144 (Vera Rubin), which will be faster than the other competitors, specifically AMD’s future MI400 series. Such type of innovation guarantees Nvidia’s sustained technological advantage in the competitive market for AI accelerators.

Analyst Enthusiasm

KeyBanc’s positive stance mirrors similar action from the others. Barclays raised its price target on Nvidia to $240 last week, along with mentioning an estimated $2 trillion surge in AI infrastructure spending. Mizuho reiterated its Outperform rating and $205 price target, along with citing Nvidia’s groundbreaking $100 billion equity investment in OpenAI, which is designed to finance 10GW of AI data center capacity. 

At the same time, Nscale Global Holdings held $1.1 billion from Nvidia, Dell, and Nokia to expand AI centers, and RedCloud Holdings entered the NVIDIA Connect program to seal supply chain loopholes within the FMCG sector. These moves underscore Nvidia’s approach of making strong partnerships while scaling its AI ecosystem aggressively.

Bottom Line

The stock rally of Nvidia is being driven by capacity growth, enhancement of productions, and strategic investment in the AI hardware. KeyBanc’s increase in price target to $250 shows huge faith in the firm’s capability to maintain growth despite the increasing competition. 

With the rising demand for AI chips, improved product innovation, and strategic partnerships, Nvidia is further solidifying its grip in the semiconductor space. For investors, the issue may not be if Nvidia will expand, but how much further it can ascend.

What is so fascinating about this price target increase is that it’s not hype-fueled optimism, rather it’s founded upon the scaling competence of Nvidia. The 90% increase in CoWoS interposers and the 40% climb in 2025 projections indicate that Nvidia is gearing up to fulfill demand that is not merely huge but also historic. 

Bringing in the increasing yields in its GB rack manufacturing with upgraded VR200 specs, and it’s obvious that Nvidia is not just keeping up, instead it will remain a generation that will be in front of the likes of AMD. 

Yet, investors need to be careful. AI infrastructure expenditure might be wild, but it’s an industry where overcapacity, regulatory issues, and geopolitical risks might very well turn the story around in no time. The optimism is based on Nvidia not only providing chips, but also projecting the future of AI infrastructure.

Nvidia has transformed once seemingly unstoppable demand into a carefully crafted supply chain advantage. The $250 target by KeyBanc may appear ambitious on the face of it, but considering the execution by the company, it could even prove to be modest. 

Markets do adore deflating pride, particularly when trillion-dollar valuations are concerned. But for now, Nvidia appears less like a speculative stock and more like one with the roadmap, the partners, and the manufacturing power to support its lofty price.