NVIDIA Corp (NVDA US): Buy: Open source models & supply procurement – new narratives, but underappreciated

Research evidence excerpt

20 August 2026

NVIDIA Corp (NVDA US)

Equities

Semiconductors & Equipment

Buy: Open source models & supply procurement – new

narratives, but underappreciated

United States

◆ Another beat & raise expected ahead of the 2QFY27 print;

memory-led price hikes could drive FY28e earnings upside

◆ Open-source SLMs could potentially unlock new TAM; early

supply capacity procurement to support growth

◆ Retain Buy; raise TP to USD360 (from USD325)

MAINTAIN BUY

TARGET PRICE (USD)

PREVIOUS TARGET (USD)

360.00

325.00

SHARE PRICE (USD)

UPSIDE/DOWNSIDE

217.56

+65.5%

(as of 19 Aug 2026)

Expect a beat and raise into the print; price hike could drive FY28e EPS upside:

Ahead of the 2QFY27 print on 26 Aug, we forecast revenue of USD94.4bn; 4%/2%

MARKET DATA

above management guidance and Visible Alpha consensus (USD91.0bn/USD92.2bn). Market cap (USDm)

5,264,952 Free float

96%

5,264,952 BBG

NVDA US

We also see 3QFY27e revenue at USD107.1bn vs consensus USD104.1bn, pointing to Market cap (USDm)

3m ADTV (USDm)

30,021 RIC

NVDA.OQ

another “beat-and-raise” quarter. With memory-led price hikes, we raise FY28e data

FINANCIALS AND RATIOS (USD)

center revenue to USD600.8bn (from USD528.1bn), 12% above consensus

Year to

01/2026a 01/2027e 01/2028e 01/2029e

(USD536.3bn), driving FY28e EPS to USD14.40; 13% above consensus (USD12.76).

HSBC EPS

4.77

9.14

14.40

16.91

HSBC EPS (prev)

4.77

8.71

13.04

15.79

Diversification towards open-source SLMs can unlock a new market: In our

Change (%)

0.0

5.0

10.4

7.0

4.68

8.97

12.76

15.24

1QFY27 preview note (19 May), we highlighted that the next major re-rating for NVIDIA Consensus EPS

PE (x)

45.6

23.8

15.1

12.9

will be driven by a new narrative as earnings and the product roadmap have become

Dividend yield (%)

0.0

0.3

0.5

38.8

18.3

10.9

8.4

less meaningful narratives for re-rating. NVIDIA is now making a push into open-source EV/EBITDA (x)

ROE (%)

98.9

88.0

69.4

48.5

models and is positioning itself as the world’s largest contributor to open-source AI.

According to NVIDIA, the aggregate of open-source models now represents the second 52-WEEK PRICE (USD)

most popular category by token generation. This is critical as open-source small

390.00

…