Bank of America Forecasts $40 EPS for Nvidia Stock in Just 5 Years. Should You Buy NVDA Here?

Nvidia’s (NVDA) remarkable artificial intelligence story keeps getting stronger, and Bank of America believes the chipmaker’s best days may still lie ahead. Following the company’s recent quarterly results, analyst Vivek Arya projects earnings could surge to $40 per share by 2030, driven by unprecedented demand for Blackwell chips.

The investment bank maintains its “Buy” rating and names Nvidia its top sector choice, highlighting five standout takeaways from the latest earnings call. Management revealed that Blackwell sales are breaking records, that cloud GPU capacity remains completely sold out across all generations, and that newer products are ramping faster than expected.

Despite rising costs, Nvidia has protected its profit margins by increasing revenue per system. BoA raised its near-term earnings estimates and stated Nvidia stock trades at an attractive valuation, especially if AI infrastructure spending continues to grow.

Valued at a market cap of $4.4 trillion, Nvidia is the largest company in the world. The tech stock has returned close to 23,000% to shareholders in the past decade and continues to expand revenue and earnings at a steady pace.

In fiscal Q3 of 2026 (ended in October), Nvidia reported revenue of $57 billion, an increase of 62% year-over-year (YoY). The chip giant added $10 billion in sales compared to the previous quarter, marking one of the most substantial sequential jumps in company history. Data center revenue alone reached $51.2 billion, demonstrating the insatiable demand for AI infrastructure that shows no signs of slowing.

CEO Jensen Huang pushed back hard against growing concerns about an AI bubble during the earnings call. He explained that three massive technology shifts should benefit Nvidia over the upcoming decade.

First, companies are moving from traditional to accelerated computing as Moore’s Law slows. Second, generative AI is replacing older machine learning systems from search engines to ad targeting. Third, agentic AI systems that can reason and plan are creating entirely new categories of applications.

The Blackwell chip launch exceeded expectations, with the newer GB300 model now accounting for roughly two-thirds of total Blackwell revenue. Notably, cloud providers have sold out their entire GPU inventory, including chips from six years ago. This persistent shortage underscores how critical these systems are to running modern applications. Nvidia now has visibility into $500 billion in Blackwell and Rubin revenue stretching through the end of 2026, though management suggested this number could grow substantially.

Nvidia reported a gross margin of 73.6% in fiscal Q3, which was above estimates despite rising input costs. The chipmaker plans to maintain its gross margin in the mid-70s range through cost improvements and better manufacturing efficiency. The tech behemoth forecast Q4 revenue growth of 14% sequentially to $65 billion.

Nvidia continues to expand its AI moat through strategic collaborations with Anthropic and OpenAI. These deals provide Nvidia with equity stakes in some of the largest AI companies.

Nvidia more than doubled its networking business to $8.2 billion, which establishes the AI bellwether as a dominant force in the AI data center infrastructure segment. Management explained that every major AI deployment includes Nvidia switches, making it a key player across technology stacks.

Out of the 47 analysts covering NVDA stock, 42 recommend “Strong Buy,” two recommend “Moderate Buy,” two recommend “Hold,” and one recommends “Strong Sell.” The average NVDA stock price target is $252.35, above the current price of $181.

On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com