BofA: Nvidia Could Generate More Cash Than Apple and Microsoft Combined

BofA Securities doubled down on Nvidia Corp. (NVDA), reiterating its Buy rating and $300 price objective — implying roughly 43% upside from Monday's $210 level. In a Monday note titled "Back to Basics," analyst Vivek Arya and team argued that the next leg higher won't be driven by another AI product cycle, but by something far more old-school: cash returns to shareholders.

Rating Change

• Previous Rating: Buy
• Current Rating: Buy (reiterated)
• Previous Price Target: Not disclosed
• New Price Target: $300

Analyst Rationale

The analysts believe Nvidia can generate free cash flows exceeding those of Apple (AAPL) and Microsoft (MSFT) combined, giving it ample flexibility to return capital to shareholders via dividends or buybacks. They noted that the current valuation does not reflect this cash-generating power, making the stock an attractive investment.

Context

The recommendation comes after a strong run for Nvidia shares over the past year, fueled by AI chip demand. However, BofA sees the next phase as different, with a focus on shareholder returns. Other analysts hold mixed views, but BofA considers Nvidia its top semiconductor pick.

What to Make of It

BofA's call reflects confidence in Nvidia's ability to convert operational strength into cash, potentially boosting the stock's appeal for income-focused investors. However, actual performance depends on management's future capital allocation decisions.