Nvidia appears to be on the brink of even greater growth, according to insights from Bank of America. Analyst Vivek Arya has reinforced his buy rating for the chip giant, bolstering its price target by $25 to reach $190. This adjustment suggests a potential 38.8% increase from the current closing price. Nvidia has already experienced a remarkable rally, with share prices surging over 176% this year alone. Arya believes that recent developments within the industry, such as Taiwan Semiconductor's third-quarter results and Nvidia CEO Jensen Huang's comments about the exceptional demand for its Blackwell chip, may enhance the company's competitive edge and present generational growth opportunities.

Additionally, Arya highlights the "underappreciated" partnerships Nvidia has with major players like Accenture and ServiceNow as further catalysts for growth. He notes a significant presence of AI in enterprise sectors, where Nvidia is increasingly seen as the preferred partner. Nvidia's extensive engagements across various verticals and products, including AI Foundry, AI Hubs, and NIMs, bolster its leadership not just in hardware but also in systems and ecosystems.

Arya also contends that Nvidia's current valuation remains "compelling." With a forward price-to-earnings ratio of approximately 48.1, the stock presents an attractive opportunity. Looking forward, Arya anticipates that Nvidia could generate at least $200 billion in free cash flow over the next two years. This would place it on par with tech giant Apple and provide significant growth options. He emphasizes that Nvidia's free cash flow generation is notably overlooked by the market, as its margin is almost double that of the average within the "Magnificent Seven." Following Arya's revised price target, Nvidia stock saw a modest 1% rise in premarket trading on Friday.