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Nvidia is about to launch its next-generation Blackwell GPU chip, raising the prospect of more stock gains.
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Melius Research said selling Nvidia stock now would be similar to selling Apple stock after the release of the first iPhone.
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According to Melius, Nvidia shares are still attractive from a valuation perspective compared to their peers.
Nvidia has soared to record highs, but investors will have to wait a while longer as the company’s next-generation Blackwell GPU will be a turning point, according to a note from Melius Research this week.
Ben Reitzes, managing director at Melius, raised his price target for Nvidia to $185, which represents a potential upside of 26% from current levels.
Reitzes believes Nvidia is approaching its Apple iPhone moment, and that selling it now would be akin to selling Apple stock after it released the first-generation iPhone.
“It’s similar to the feeling around product cycles with Apple’s iPhone about fifteen years ago, just on a different scale. So while it sounds strange, Nvidia giving up here after the hit Hopper is like giving up Apple on iPhone 1 or 2,” Reitzes said, referring to the current generation Hopper chip.
Nvidia stock has been on a tear since OpenAI released ChatGPT in November 2022. Since then, Nvidia has soared nearly 800% to become the largest company in the world, with a market cap of over $3.5 trillion.
Nvidia’s Hopper and the upcoming Blackwell GPU chips are the foundation of advances in artificial intelligence, powering everything from AI chatbots like ChatGPT to text-to-video and self-driving cars.
“Big clouds, governments and large corporations will continue to invest more in this once-in-a-lifetime opportunity,” Reitzes said.
And Nvidia’s enviable position means big profits are in store for its investors, the note said.
“Not only are we excited about Blackwell hitting the streets upside down in 2025 – and Rubin in 2026 – but we are also increasingly optimistic that gross margins could fall solidly back to the mid-70s by mid-FY26,” Reitzes said.
Nvidia could make more than $5 per share in profits by 2027, which the note said “seems conservative now.” Reitzes raised his 2025 through 2027 revenue and profit estimates for Nvidia, citing higher gross margins and continued investments from cloud hyperscalers.
And at these earnings levels, Nvidia stock looks attractive from a valuation perspective.
“Even with a declining growth rate on large numbers, Nvidia’s CY2025 PEG ratio is approximately 0.8x versus our estimates. This ratio is 33% less than Broadcom’s and the lowest in the Mag 7 by a wide margin” , says Reitzes.
