Aletheia Capital has moved Nvidia to a Buy rating from Hold and assigned a $250 price target, arguing that previously noted inventory pressures and the slow roll-out of rack systems should normalize beginning in the fourth quarter of fiscal 2026. The research house pointed to accelerating module assembly and an expected pickup in rack shipments as drivers of that normalization.
The firm highlighted valuation and growth metrics in support of the change: Nvidia is trading at a price-to-earnings ratio of 46.97 while its price/earnings-to-growth ratio sits at 0.78, a combination Aletheia describes as leaving the shares attractively valued relative to projected growth.
Aletheia Capital quantified the broader market opportunity, estimating that industry-wide compute capital expenditure will rise 75% year-over-year to roughly $530 billion. In that scenario, Nvidia and TPU supply chains are expected to secure most of the value created by the expansion in compute spending.
On the revenue front, the firm projects Nvidia’s data-center sales to reach $475 billion in the period spanning the third quarter of fiscal 2026 through the fourth quarter of fiscal 2027, a figure the firm notes closely tracks Nvidia’s own guidance of $500 billion. The research house also called attention to the company’s recent growth, noting that revenue climbed 65% over the last twelve months to $187 billion.
Near-term catalysts identified by Aletheia include the company’s upcoming earnings report, with results due on February 25, and the expectation that both fourth-quarter fiscal 2026 results and first-quarter fiscal 2027 guidance will surpass consensus estimates. The price target of $250 reflects a valuation multiple of 25 times the average fiscal 2027-2028 price-to-earnings ratio, according to the firm.
The firm also pointed to third-party analysis, indicating the stock appears undervalued based on InvestingPro metrics. That analysis is said to include 16 additional ProTips and a more detailed Pro Research Report for subscribers seeking expanded coverage of the company’s market position and growth trajectory.
Other broker commentary referenced in market notes supports the upbeat tone. RBC Capital reiterated an Outperform rating for Nvidia and cited a robust backlog as a central factor in its view. RBC expects Nvidia to top earnings estimates by 3% to 4% and suggested management may address or increase a previously cited backlog of more than $500 billion for 2025 and 2026.
Corporate portfolio activity also featured in the reporting. Recent regulatory filings show Nvidia has fully sold its stake in Recursion Pharmaceuticals; the company had held 7.71 million shares for about two years before liquidating the position. Conversely, Nvidia has taken a substantial ownership stake in Synopsys, acquiring 4.82 million shares valued at over $2 billion and becoming the sixth largest shareholder in that company.
Finally, the notes referenced strategic moves by other technology companies that relate to the broader AI compute market. Google is reported to be examining ways to boost the market for its artificial-intelligence chips by providing increased financial support to data-center partners, an initiative aimed at expanding access to computing power as it competes in the AI chip space.
How this affects markets and logistics
- Semiconductor and AI compute equipment suppliers could see demand shifts if the projected capex growth materializes.
- Data-center operators and cloud providers are central to the demand narrative, given projected increases in rack shipments and module builds.
- Supply-chain and channel inventory dynamics are highlighted as a near-term operational factor for hardware vendors and distributors.