BofA Says Nvidia Is Undervalued as AI Investments Expand

Nvidia is the leading supplier of accelerators used to train and run generative artificial intelligence models. The chipmaker is also investing across the wider AI ecosystem, including support for OpenAI and data-center construction, as it seeks to reinforce demand and secure its position across the computing supply chain. Investors have grown concerned that such financing commitments and capital spending could pressure cash flow and expose Nvidia to concentrated AI infrastructure risks.

Bank of America said the market is overstating those concerns and values Nvidia at a discount of roughly 34% to 50% to what the brokerage considers fair value. BofA maintained its buy rating and set a $350 price target, arguing that investments in AI infrastructure should strengthen Nvidia’s long-term ecosystem rather than undermine its outlook. The bank also recommended that Nvidia increase share repurchases while its stock remains undervalued, using its substantial cash generation to improve shareholder returns.