Piper Sandler Deems Nvidia Undervalued, Sets $300 Price Target on AI Dominance

The term “cheap” is arguably the most misleading phrase in investing. It only describes a price relative to a forecast, and the forecast itself does the heavy lifting.

Consequently, this label frequently attaches itself to stocks that have already experienced significant appreciation. When a company doubles its revenue, its share price rises in tandem, leaving the valuation multiple roughly unchanged.

Nothing actually became less expensive from a consumer’s perspective; the denominator simply grew faster than the numerator.

The artificial intelligence trade has operated under this logic for two years. Chip stocks absorbed enormous gains while analysts reassured clients that the shares remained reasonable, as profit growth outpaced price appreciation. This argument has repeatedly proved correct, making skepticism a costly endeavor.

The pertinent question, then, is not whether the largest chip stock has become expensive, but rather what occurs when a firm applies the word “cheap” to a company already valued at over $5 trillion while attaching a price target most of Wall Street would consider conservative.

This exact combination emerged this week. Piper Sandler initiated coverage of Nvidia (NVDA) with an overweight rating and a $300 price target, describing the company as the “outright leader in AI compute,” according to Investing.com.

How Nvidia’s Earnings Outpaced Its Own Share Price

Before the valuation math becomes clear, the sheer scale of Nvidia’s recent earnings must be acknowledged.

Revenue for the quarter ended July 26 reached $96.2 billion, a 106% increase year-over-year, according to Nvidia. Data center revenue constituted $89.0 billion of this total, with gross margin holding steady at 75%.

Adjusted earnings came in at $2.22 per share for the quarter. For the entirety of fiscal 2026, which concluded in January, adjusted earnings totaled $4.77 per share.

Placed side by side, the shape of the story emerges. A single quarter now delivers nearly half of what an entire year produced just eight months prior.

“Compute is revenue,” Nvidia founder and CEO Jensen Huang stated in the company’s earnings release.

The company returned approximately $26 billion to shareholders during the quarter through buybacks and dividends, while retaining roughly $99 billion on its repurchase authorization.

This is the context that allows an analyst to describe a $5 trillion company as inexpensive without ridicule. The share price has roughly kept pace with profit growth; it has not obviously outrun it.

What Piper Sandler’s New Nvidia Rating Actually Means

Analyst David O’Connor initiated the stock at overweight as part of a broader coverage launch across AI chipmakers, and the specific figures behind the call matter more than the rating itself.

Nvidia holds roughly 80% of the AI compute market and approximately 50% of unit shipments, the firm estimated, according to Investing.com. The note stated that industry supply should remain constrained for another two to three years, with agentic AI workloads driving a step change in demand.

From there, the model becomes aggressive. Piper Sandler projects Nvidia revenue growing at a 47% compound annual rate through fiscal 2030, with earnings reaching $30 per share.

Comparing that estimate against the company’s reported results reveals the required growth trajectory. Moving from $4.77 in adjusted earnings for fiscal 2026 to $30 by fiscal 2030 requires profit compounding at roughly 58% annually for four consecutive years without any misstep.

The $300 target is derived by applying a 14-times multiple to calendar 2028 estimates. At this multiple, the analyst positioned Nvidia among the least expensive names in the AI complex, according to Investing.com.

The broader sector call rested on what the firm described as “insatiable demand” for compute capacity, according to CNBC.

Strip away the rhetoric and the call reduces to a single bet: pay $300 today, and you are paying roughly 10 times the earnings Piper Sandler expects to arrive in 2030.

Where the $300 Nvidia Target Sits Against Wall Street

Much of the coverage surrounding this call has skipped the most relevant comparison. A $300 target sits below the crowd rather than above it.

• Piper Sandler set its target at $300, roughly 34% above the prior close, according to CNBC.
• BMO Capital carries a $340 target and an outperform rating, built on a 70% growth projection for fiscal 2028, according to Investing.com.
• The average 12-month target across analysts covering the stock stands at $327.18, with 58 buy ratings against one sell, according to Investing.com’s Nvidia quote page.
• Wedbush’s Dan Ives set a $250 base case for the end of 2026, according to TheStreet.
• JPMorgan reset its Nvidia target to $265 for the rest of 2026, according to TheStreet.

What stands out in my analysis of that target board is the gap between the language and the arithmetic. Piper Sandler employed the most bullish vocabulary available regarding Nvidia’s competitive position, yet published a number roughly 8% below what the average analyst already expects.

The firm is bullish on the business but disciplined about the multiple, which represents a different posture than most Nvidia notes take.

Other banks have justified higher targets partly by stretching the multiples they are willing to pay. Piper Sandler arrived at a lower number by holding its multiple down.

For anyone holding the stock, this distinction alters the value of the call. A target resting on a modest multiple has room to survive a market that decides to pay less for growth, which is precisely the scenario that has punished AI names during every drawdown since 2024.

What the Groq Antitrust Probe Could Do to the Math

The initiation landed the same week as a problem no earnings model captures.

The Justice Department is investigating whether Nvidia structured its roughly $20 billion licensing agreement with AI chip startup Groq to avoid antitrust review, according to Bloomberg. The arrangement licensed Groq’s inference chip technology and brought over several of its executives, including founder Jonathan Ross, without a formal acquisition.

Regulators issued a formal demand for information, and the inquiry remains open, according to Bloomberg. Nvidia shares slipped about 1% on the report.

The near-term financial risk appears limited, as officials do not currently expect the deal to be unwound. The longer-term question is structural. Nvidia has used licensing, hiring, and minority investments to absorb capability across the AI stack, and a ruling that this pattern requires merger review would slow the pace of that expansion.

Piper Sandler’s 47% growth rate assumes Nvidia continues converting demand into revenue at the speed it has managed for three years. Regulatory friction is one of the few factors that can interrupt that conversion without any change in demand.

Nvidia guided to $108 billion in revenue for the current quarter, marking another sequential step of nearly $12 billion. That report, due in November, serves as the next real test of whether a 14-times multiple on 2028 earnings was conservative or optimistic.

Until then, investors face an unusual situation. My assessment is that the most valuable company on earth now has a Wall Street bull arguing it is underpriced, yet that bull is requesting less than the consensus already expects.

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