Investors know all about AI suppliers by now, and NVIDIA Corporation (NASDAQ: NVDA) is the leader by a wide margin. Advanced Micro Devices Inc. (NASDAQ: AMD) is also now getting much more deeply entrenched in the AI game. Their performance has been more than impressive, with NVIDIA up 34% YTD and AMD up 80% YTD.
HSBC analyst Frank Lee now sees even stronger upside ahead for these two AI plays. HSBC has upgraded Nvidia to Buy from Hold, and Lee raised his price target all the way up to $320 from $200 — versus about $180 as of Tuesday’s close. He also reiterated his Buy rating AMD and hiked his target to $310 from $185, versus a current price of about $219.
Oggonomics always reminds its readers that no single analyst report should ever be the sole reason to buy or sell a stock. That’s particularly true when upside targets are much higher than consensus — and calling for 50% upside is not exactly the norm for well established companies being covered by Wall Street.
For NVIDIA, HSBC’s report sees the potential for significant earnings upside out to 2027 due to renewed chip allocation momentum. Nvidia has an aggressive target out to 2027 on its CoWoS wafer forecasts with Taiwan Semi, which should drive even higher targets in the 2027 datacenter revenues. This is above and beyond NVIDIA’s hyperscalers.
An additional benefit for both NVIDIA and AMD is a potential easing of China graphic processor sales. This is based on the possible U.S.-China trade deal, although headlines from the last week might put some risk on that.
HSBC is now forecasting earnings $8.75 per share in 2027. That is more than $2.00 per share above the consensus estimate of $6.48, which effectively is discounting revenues tied to chip exports into China.
For AMD, HSBC noted that AMD’s recent deal with OpenAI brings a more favorable picture and also improves its visibility for future orders. Lee even noted that there could be further upside with a pricing premium and additional AI GPU volumes.
AMD has many of the same potential benefits as NVIDIA when it comes to sales into China after President Trump signed a revenue share (or a tax/fee) of sorts. Now the market just has to wait and see what this really generates in revenue for both NVIDIA and AMD — and whether or not the most recent headlines of China/US troubles starting up again.
If HSBC is proven to be correct, this would put NVIDIA’s future market cap closer to $8 trillion — versus about $4.4 trillion at the present time. AMD currently has a market cap of about $350 billion.
All analyst commentary in this reporting is tied to HSBC’s analyst reports. Oggonomics does not maintain any formal ratings and price targets on the companies mentioned.
