Wells Fargo Raises Nvidia $NVDA Price Target to $220 on Strong AI Demand and Data Centre Growth Through 2027

Nvidia’s shares have surged to new heights in 2025, propelled by unrelenting demand for its artificial intelligence hardware, yet analysts continue to see substantial upside ahead. With Wells Fargo recently lifting its price target on the chipmaker to $220 from $185 while retaining an overweight rating, the move underscores a broader conviction that Nvidia’s dominance in data centres and AI infrastructure remains underappreciated by the market, even as the stock trades near $183.

Analyst Optimism Amid AI Boom

The adjustment by Wells Fargo reflects growing confidence in Nvidia’s ability to capitalise on the exponential growth in AI-driven computing. As of 11 August 2025, Nvidia’s stock price stands at $182.74, marking a 1.09% increase from its previous close of $180.77, according to Nasdaq real-time data. This places the new $220 target roughly 20% above current levels, signalling expectations of robust earnings growth and market share expansion.

Such upgrades are not isolated. Goldman Sachs, for instance, recently hiked its own target ahead of Nvidia’s upcoming earnings report on 27 August, citing strong prospects for the company’s Blackwell architecture and sustained AI investment cycles. Analyst sentiment, as aggregated by sources like TipRanks, rates Nvidia as a strong buy with an average 12-month price target hovering around $200, based on evaluations from 38 analysts as of early August 2025. This consensus points to a potential 9–10% upside from today’s price, though Wells Fargo’s more aggressive stance suggests even greater optimism.

Driving Factors Behind the Upgrade

At the heart of these revisions lies Nvidia’s commanding position in the data centre segment, where revenue has ballooned amid the AI arms race. Projections from Wells Fargo and peers anticipate Nvidia’s data centre revenue to exceed $126 billion by fiscal 2027, building on estimates of $93 billion for 2026 and a staggering jump from $47.5 billion in 2024. These figures stem from analyst models that factor in hyperscale cloud providers and enterprises ramping up GPU deployments for machine learning and generative AI applications.

Consider the broader market context: global data centre spending is forecasted to reach $1 trillion by 2028, per industry estimates from sources like Yahoo Finance. If Nvidia captures even a conservative 25% share—down from its current dominance of around 30% in AI accelerators—that could translate to $250 billion in data centre revenue alone by then. Adding in growth from gaming, automotive, and professional visualisation segments, which contributed about $16 billion in fiscal 2025, total revenue might climb to $273 billion under moderate 10% annual growth assumptions for non-data centre lines.

• Revenue Breakdown Projections (Fiscal Years):
• 2025: $131 billion (actual, per company filings)
• 2026: Estimated $180–200 billion, driven by Blackwell ramp-up
• 2027: Potential $220–250 billion, assuming sustained AI capex

These models, often derived from bottom-up analyses by firms like Goldman Sachs and Barclays, incorporate variables such as wafer production rates and chip utilisation. For example, Barclays recently noted healthy utilisation for Nvidia’s Blackwell chips despite production shortfalls, projecting an additional $2 billion in quarterly compute revenue upside.

Valuation in Focus: Premium Justified?

Nvidia’s forward price-to-earnings ratio sits at 44.35 based on expected earnings per share of $4.12 for the next fiscal year, as per consensus estimates from StockAnalysis.com dated 8 August 2025. This multiple, while elevated compared to the broader tech sector’s average of around 25–30, appears defensible given Nvidia’s earnings trajectory. Analysts project EPS to hit $4.31 for the current year, with some models forecasting $5 or more by calendar 2025, implying a PEG ratio of just 0.6—far below the Magnificent Seven average of 1.9, according to Bank of America insights.

Critics might argue that such valuations bake in perfection, especially with risks like supply chain bottlenecks or competition from AMD and custom silicon from cloud giants. Yet, the dark wit in markets often lies in underestimating incumbents: Nvidia’s moat, fortified by its CUDA software ecosystem, has consistently thwarted challengers, turning potential threats into mere footnotes.

Market Sentiment and Risks

Sentiment from verified sources remains overwhelmingly positive. CNN’s stock forecast as of 9 August 2025 labels Nvidia a strong buy with a median target aligning closely to Wells Fargo’s view. Yahoo Finance reports echo this, with analysts highlighting Nvidia’s role as the “stock of the decade” amid AI demand forecasts pushing share prices toward $1,000 by 2030 in aggressive scenarios.

That said, investors should temper enthusiasm with caution. Nvidia’s 52-week range from $86.62 to $183.88 reflects volatility, with a 67.58% gain over the period but vulnerability to macroeconomic shifts. The upcoming earnings on 27 August could serve as a litmus test; any guidance shortfall on Blackwell production or AI spending might trigger a pullback, as seen in past cycles.

Implications for Investors

For those eyeing Nvidia, the Wells Fargo upgrade reinforces a narrative of enduring growth in an AI-centric world. With shares up 34.49% over the past 200 days from an average of $135.87, the momentum is palpable, yet the path to $220 hinges on execution. Long-term holders might view dips as buying opportunities, while traders could monitor volume—currently at 123 million shares against a 10-day average of 161 million—for signs of conviction.

In a market where AI hype meets reality, Nvidia’s trajectory suggests the upgrades are not mere optimism but a calculated bet on technological inevitability. As data centres evolve into AI factories, the chipmaker’s fortunes seem poised to scale accordingly, rewarding those who bet on the silicon backbone of tomorrow’s economy.

References

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• Barclays. (2025). Nvidia compute revenue projections. Retrieved from https://seekingalpha.com/article/4811434-coreweave-q2-preview-high-upside-even-greater-downside
• CNN Business. (2025, August 9). Nvidia stock forecast. Retrieved from https://www.cnn.com/markets/stocks/NVDA
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