Cantor Fitzgerald reiterates Nvidia stock rating, sees path to $10T market cap

Investing.com - Cantor Fitzgerald has reiterated its Overweight rating and $240.00 price target on Nvidia (NASDAQ:NVDA) following the chipmaker’s recent investment in OpenAI. According to InvestingPro data, the stock currently trades at $188.89, with analysts’ targets ranging from $100 to $270.

The investment bank views Nvidia’s move as a strategic decision that solidifies its position as "the de facto AI infrastructure company" that is "quarterbacking the robust AI industry buildout" still in its early stages. This strategic positioning has helped drive impressive revenue growth of 71.55% over the last twelve months, with InvestingPro analysis showing excellent financial health scores across growth, profit, and momentum metrics.

Cantor Fitzgerald addressed concerns about potential "circularity of vendor financing" and an "AI bubble" following the OpenAI partnership announcement, stating it is "not concerned" as "AI is just getting started." The company’s strong fundamentals support this view, with a current ratio of 4.21 indicating robust liquidity and a moderate debt level relative to equity at 0.11.

The firm identified Nvidia as its "top pick" among AI-levered stocks, projecting a "clear path to $10T+ market cap" for the semiconductor giant that has become central to artificial intelligence computing infrastructure. Currently valued at $4.59 trillion, the company maintains strong profitability with a gross margin of 69.85%. For deeper insights into Nvidia’s valuation and growth potential, access the comprehensive Pro Research Report available on InvestingPro, which includes over 20 additional key metrics and expert analysis.

Cantor Fitzgerald’s analysis focused on two key questions: how Nvidia would deploy excess free cash flow from its data center business growth, and how emerging AI players like OpenAI, Oracle, xAI, and others would fund their planned investments in AI infrastructure. The company’s strong cash position is reflected in its robust levered free cash flow of $72 billion over the last twelve months.

In other recent news, Microsoft has secured access to over 100,000 of Nvidia’s latest GB300 chips through a $19.4 billion deal with Nebius Group NV. This arrangement aims to bolster Microsoft’s computing power for developing large language models and a consumer AI assistant. Meanwhile, KeyBanc has raised its price target for Nvidia to $250, citing increased supply of CoWoS technology, which is expected to enhance Nvidia’s growth in the AI chip market. Former Baillie Gifford investment manager James Anderson, however, expressed concerns about potential bubble conditions in the AI sector, highlighting Nvidia’s $100 billion investment in OpenAI as a particular area of worry.

In another development, JPMorgan has increased its price target for Hon Hai Precision Industry to NT$270, maintaining an Overweight rating. The adjustment reflects expectations for stronger AI server growth in the coming years, driven by increased orders from cloud service providers and robust growth in Nvidia rack revenues. These recent developments indicate significant activity and strategic investments in the technology sector, with companies like Microsoft and Nvidia making substantial moves to enhance their AI capabilities.

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