Predicting Nvidia's Stock Price in the Next 12 Months
Nvidia's AI Chip Orders and Chinese Market Recovery
Nvidia, the world's leading AI chip manufacturer, has placed orders for 300,000 China-specific AI chips with Taiwan Semiconductor Manufacturing Company (TSMC). This move comes after Nvidia incurred a significant setback in the first quarter of fiscal 2026, with a $4.5 billion charge due to restrictions on shipments to Chinese customers.
However, recent assurances suggest that Nvidia will once again be able to sell its AI chips to Chinese customers. This development, coupled with the aggressive spending on AI infrastructure by governments worldwide, is expected to boost Nvidia's annual revenue by $10 billion to $15 billion. In fact, Nvidia is projected to generate an estimated $15 billion in revenue from sales to Chinese customers in the second half of the year.
Nvidia's dominance in the market for AI chips has contributed to its growth over the past several quarters. The company, with a market cap around $4.4 trillion, is currently the world's largest company. Its stock returns have outpaced the 18% gains of the S&P 500 index during the same period, delivering a return of 68% in the past year as of market close Aug. 4.
The most optimistic analyst price target for Nvidia's stock over the next 12 months is about $304.45, according to a DCF valuation by XTB Research as of late August 2025. Other high price targets include $225 from Bernstein Research and Robert W. Baird. The most optimistic analyst gives a price target of $250 for Nvidia stock in the next 12 months, suggesting potential gains of 39% from current levels.
Nvidia's forward P/E ratio is 56, indicating a rich valuation. Yet, the company's potential revenue for the current fiscal year (ending in January 2026) could potentially coast past Wall Street's expectations of $201 billion.
Investments in AI data center infrastructure by tech giants like Nvidia are aimed at bringing more AI-focused cloud solutions to customers. McKinsey estimates that 60% of AI infrastructure spending is likely to be directed toward chips and computing hardware. The capital expenses of big tech players (Microsoft, Amazon, Alphabet, Meta Platforms) are expected to reach $364 billion this year, up from an earlier estimate of $325 billion.
Nvidia is currently sitting on a stockpile of 600,000 to 700,000 existing H20 AI processors. These tech companies are investing substantially in AI data center infrastructure to capitalise on the strong growth expectations from AI chip demand and cloud solutions.
In conclusion, Nvidia's strategic moves, coupled with the growing demand for AI chips and cloud solutions, position the company well for continued growth in the coming months and years.
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