The investment bank sees the Santa Clara, Calif., semiconductor titan benefiting from the rise of artificial intelligence.
"Rising AI adoption, expanding use case across cloud, enterprise, edge and telecommunications can help NVDA double its content and triple its data center sales over the next few years," analyst Vivek Arya said, according to Dow Jones.
The stock recently traded at $764.78, up 2.5%. It has soared 43% in the past three months on the back of its sizzling financial performance.
"As the NVDA mix shifts more toward data center (highest margin business with 74-76% gross margins), we see a path for NVDA's gross margins to expand toward 70% (from 66% in 2020)," Arya said.
Nvidia also benefited from growing optimism that its $40 billion proposed takeover of fellow chip company Arm Holdings SFTBY will be approved.
In April, Oliver Dowden, the U.K.'s secretary of state for digital, culture, media and sport, said regulators were looking at the proposal. Arm is based in the U.K. Regulators in the U.S. began investigating the deal in February.
But Nvidia Chief Executive Jensen Huang said this month that he remains confident the deal to buy Arm from Softbank Group of Japan will be approved.
BofA’s Arya isn’t the only one expressing optimism about Nvidia. On Thursday, Jefferies analyst Mark Lipacis boosted his price target on the semiconductor sultan to $854 from $740.
“We see NVDA as a major beneficiary of the fourth tectonic shift in computing,” he said, according to CNBC.