TLDR
- Jefferies increased NVIDIA’s price target from $250 to $275 while keeping its Buy rating
- J.P. Morgan confirmed its Buy rating on the stock January 13
- NVIDIA and Eli Lilly will invest up to $1 billion over five years in an AI drug discovery lab
- Analysts say the stock trades cheaply at mid-teens multiple for 2027 earnings estimates
- Wall Street expects continued estimate increases over upcoming quarters
Wall Street analysts upgraded their outlook on NVIDIA following recent announcements. Jefferies bumped its price target to $275 from $250 on January 16.
The firm kept its Buy rating intact. Analysts pointed to their updated accelerator builds model running through 2028.
Jefferies described NVIDIA as “pretty cheap” at current prices. The stock trades at mid-teens multiple relative to 2027 earnings projections.
J.P. Morgan also backed the stock with a Buy rating January 13. The bank chose not to set a specific price target.
$1 Billion Lab Aims at Drug Development
The rating changes arrived alongside a major business announcement. NVIDIA and Eli Lilly revealed plans for an AI co-innovation lab.
Jensen Huang announced the partnership at the J.P. Morgan Healthcare Conference in San Francisco. The NVIDIA CEO appeared with Lilly’s Dave Ricks.
Both companies will pour up to $1 billion into the project over five years. Money goes toward infrastructure, computing resources, and personnel.
The San Francisco Bay Area will house the facility. This marks the first collaboration of this scale between the two firms.
Merging Technology and Pharma Expertise
The lab targets complex biological modeling challenges. NVIDIA supplies AI capabilities while Lilly brings drug development knowledge.
Company leaders framed it as a roadmap for future pharmaceutical research. The effort addresses difficult questions in understanding biological systems.
Jefferies analysts see room for earnings beats in coming quarters. They project estimates will climb higher through the next several reporting periods.
The investment bank noted NVIDIA’s estimate revisions may be smaller than Broadcom’s. Jefferies still ranks Broadcom as its top semiconductor pick.
For Broadcom, the firm models 2028 earnings per share above $19. Conservative calculations for OpenAI and Meta point to $25 EPS possibilities.
NVIDIA builds computer graphics processors, chipsets, and multimedia software. The business splits between Compute & Networking and Graphics Processing Unit divisions.
Wall Street gives the stock a Strong Buy consensus rating of 1.34. Revenue jumped 65.22% over the past twelve months to $187.14 billion.
The stock carries a P/E ratio of 46.58. Its PEG ratio sits at 0.77, indicating favorable pricing versus growth rates.
Analysts believe additional upside exists beyond 2027. The firm’s accelerator model extending to 2028 supports this view.
The partnership with Lilly represents a new revenue stream. AI applications in drug discovery continue expanding across the pharmaceutical industry.
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