Bank of America Says Nvidia Stock Could Rise 50 Percent

Wall Street has grown nervous that Nvidia is turning into a bank for the artificial intelligence boom. These fears stem from recent moves, including a deal where Nvidia backed up to 105 billion dollars in leases for an OpenAI data center in Ohio. Critics worry about a circular money loop because Nvidia sells chips to OpenAI and now guarantees its rent.

Bank of America analyst Vivek Arya believes the market is misreading the situation. He points out that Nvidia only covers the leftover gap if OpenAI defaults, and the company secures exclusive compute provider status on the campus in return. Arya values Nvidia based on free cash flow and sees the stock trading at a discount of up to 50 percent compared to its fair value.

Nvidia shares currently trade around 219 dollars, while Bank of America maintains a price target of 350 dollars. Most analysts on Wall Street also rate the stock as a buy ahead of the upcoming earnings report on August 26. Investors will closely watch for more details on these financial commitments when the company reports its earnings.