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Investing.com -- Barclays (LON:BARC) hiked its price target on Nvidia (NASDAQ:NVDA) to $200 from $170, citing signs of robust demand across the company’s supply chain that could drive upside in the second half (2H) of the year.
The new target implies a 38% upside from Nvidia’s June 16 closing price of $144.69.
Following checks with the supply chain after first-quarter earnings, Barclays identified approximately “$2 billion in upside in July for Nvidia vs. Street numbers," leading the firm to lift its full-year Compute revenue estimate to $37 billion from $35.6 billion.
Blackwell capacity reached about 30,000 wafers per month in June, falling short of Barclays’ previous expectation of 40,000 wafers, but the bank points out that "utilizations are healthy, and the supply chain sounds positive on the 2H of the year."
Blackwell Ultra remains on track, with mass production scheduled for the third quarter.
System sales are also improving, contributing an estimated 25% of revenue in July and approaching 50% by October. Barclays analysts note that "both Ultra and higher volume should help gross margins (GMs) in the 2H."
As a result, the firm revised its Compute revenue forecasts for the third and fourth calendar quarters to $42 billion and $48 billion, respectively, above its prior projections and the Street consensus.
The bank’s new price target increase is based on applying a 29x multiple to its 2026 non-GAAP earnings per share (EPS) estimate of $6.86, which was previously $6.43.
"Even with the recent run, this name has the most potential upside in our coverage for the 2H and we raise our PT to $200," the analysts led by Tom O’Malley wrote.
Barclays maintained its Overweight rating on Nvidia, while its view on the broader U.S. Semiconductors & Semiconductor Capital Equipment sector remains Neutral.
In the note, Barclays also highlighted that demand for Amazon’s (NASDAQ:AMZN) Trainium 2 has risen, with supply able to meet around 70% of the over 2 million units of demand, adding roughly $300 million in upside to this year’s ASIC revenue, though part may shift into 2026.
TPU supply checks were stable, with V7 entering the supply chain in May, and third-quarter volumes expected to rise 20% quarter-over-quarter.