Oppenheimer Maintains Outperform on Nvidia (NVDA) as Hyperscaler Capex Accelerates

Nvidia Corporation (NASDAQ:NVDA) is one of the best data center stocks to buy now, and the top stock in this list. Despite its large market capitalization, the stock has advanced 36% year-to-date, underscoring the strength of demand and execution. On August 21, analysts at Oppenheimer reaffirmed their Outperform rating on Nvidia Corp. (NASDAQ:NVDA) with a $200 price target, just ahead of the company’s August 27 earnings release. The analysts believe that the company’s results could come in above consensus, with expectations for fiscal Q2 revenue of $45.8 billion and EPS of $1.00. For fiscal Q3, revenue estimates are of $52.8 billion and EPS of $1.19.

The analysts highlighted strong adoption of Nvidia’s NVL72 rack-scale system, now being deployed by major cloud providers. At the same time, he argued that the top four hyperscalers have lifted their 2025 capex outlook to $365 billion, which is a sharp increase from earlier forecasts. This should directly benefit Nvidia Corp.'s (NASDAQ:NVDA) infrastructure business.

On the other side, China continues to be a relatively small contributor, estimated at under 5% of sales after the April H20 ban, though Nvidia Corp. (NASDAQ:NVDA) still had a $16 billion H20 backlog when restrictions were introduced. The company has since secured an export license for H20 GPUs, with a 15% revenue share going to the U.S. government. The analyst expects Nvidia to offset this cost through higher pricing.

Over the coming quarters, the analysts project Nvidia’s gross margins will hold in the mid-70% range, supported by ongoing demand and a smooth ramp of the GB300 (Ultra) refresh in the third quarter. In their view, Nvidia Corp. (NASDAQ:NVDA) remains the best-positioned company in AI infrastructure, backed by a strong product cycle and accelerating investments into the AI and data center space.

Nvidia Corp. (NASDAQ:NVDA) designs and manufactures graphics processing units (GPUs), system-on-a-chip units (SoCs), and AI hardware and software. Its GPUs are used in gaming, high-performance computing, AI training, and inference and serve as the backbone of data center infrastructure worldwide.

While we acknowledge the potential of NVDA as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.