Nvidia’s Path to $160: Strong LLM Training and Potential Upside Amid Blackwell Concerns
Melius notes that Nvidia’s stock could reach their $160 target fairly quickly. Initially, they were worried about issues with Nvidia’s new Blackwell chips, such as a three-month delay due to possible overheating and design problems. However, despite these concerns, they believe that the production of Blackwell systems could still be strong by April 2025. Their current observations suggest that the training of large language models (LLMs) is continuing robustly among big customers, even though the applications that use these models in production are taking longer to gain momentum.
Melius highlights that certain applications, like OpenAI’s GPT-4o voice mode, SoraAI, and Microsoft’s enterprise app Copilot, are being adopted slower than expected. However, Nvidia’s sales of H100 and H200 chips are still benefiting from strong efforts by companies like Meta, which is training Llama 4, and OpenAI, which is preparing GPT-5, as well as other well-funded labs. When training is intense, companies need Nvidia’s technology.
The firm mentions the possibility of a “Triple Lindy” scenario, which would involve Nvidia significantly exceeding expectations by reporting $2 billion more revenue in F2Q25 than expected, raising its F3Q25 forecast by another $2 billion, and suggesting further growth in F4Q25. Although this scenario seems possible, it’s not essential for long-term investors. Given the massive scale of Nvidia’s data center sales, which are projected to reach a $105 billion annual revenue run rate in FY25, small differences in numbers are not a major concern. If Nvidia were to achieve this “Triple Lindy” scenario, it could result in a significant earnings increase and a rapid rise in stock price towards the $160 target within 18 months.
Analyst Ben Reitzes clarifies that while this optimistic scenario is possible, it’s not required for those with a long-term investment outlook. Even without hitting every target precisely, Nvidia’s stock has strong potential, and the company remains well-positioned in the market.
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