BlockBeats News, August 26th, U.S. bank maintains a "Buy" rating on NVIDIA (NVDA) with a $350 price target. The bank expects NVIDIA's second-quarter revenue and guidance to once again exceed market expectations by 3% to 4% driven by Vera Rubin's mass production expansion, but believes that the performance numbers are not the most important focus of this earnings report.

The U.S. bank stated that the market should pay more attention to whether NVIDIA discloses multi-year off-balance-sheet commitments to ensure chip supply, power, AI models, and customer demand. While quantifying the related potential liabilities cannot completely eliminate the risk of AI infrastructure construction, it helps the market reassess NVIDIA's currently suppressed valuation.

In September 2025, when NVIDIA announced a $100 billion investment plan in OpenAI with a corresponding 10GW hash rate, its forward EV/EBITDA was about 27 times. Since then, this valuation multiple has dropped by 44% to approximately 15 times, half that of AMD's approximately 32 times. The U.S. bank believes that the current discount has excessively factored in a worst-case financing scenario of about $500 billion, equivalent to 10% of the enterprise value, including $150 billion to $200 billion in multi-year procurement commitments and cloud service contracts. If AI demand remains strong, NVIDIA may not need to bear the costs of idle capacity or stranded assets.

The U.S. bank also suggested that NVIDIA increase shareholder returns. Apple returned 82% of its free cash flow to shareholders from FY 2013 to 2025 and repurchased about 43% of outstanding shares; in contrast, the market expects NVIDIA's free cash flow return rate for FY 2027 to 2028 to be only about 37%. If increased to 50% to 75%, it could provide stronger support for the stock price. The bank expects NVIDIA to generate approximately $1 billion in free cash flow per day next year, enough to support both ecosystem commitments and stock repurchases.