CLSA Stays Bullish On Nvidia, Sees AI Demand Defying Bubble Fears

Brokerage CLSA has reiterated its High Conviction Outperform rating on Nvidia Corp. with a target price of $270, citing strong results and upbeat guidance that challenge the growing narrative of an AI slowdown.

The firm noted that Nvidia’s latest quarter delivered a 3.5% revenue beat on the top end of guidance, its best in four quarters, and projected Q4 FY26 revenue at $66.3 billion, ahead of the $64 billion estimate. CLSA highlighted steady momentum, surging token consumption, and high usage despite chip shortages as key drivers.

Nvidia delivered a surprisingly strong revenue forecast and pushed back on the idea that the AI industry is in a bubble, easing concerns that had spread across the tech sector, Bloomberg said.

It further noted that, the outlook signals that demand remains robust for Nvidia’s artificial intelligence accelerators, the pricey and powerful chips used to develop AI models. Nvidia had faced growing fears in recent weeks that the runaway spending on such equipment wasn’t sustainable.

The 'AI bubble' essentially refers to the possibility of the AI boom having outrun the fundamentals, where the stock valuations of AI-linked tech companies are seen as inflated as compared to their profits and revenue.

Also, circular deals where the money keeps flowing between two or more inter-connected companies, and one company helps lift the other's revenue, add to the 'bubble' anxiety.

However, regardless of the anxiety surrounding the AI bubble, demand for Nvidia's chips remains strong among cloud giants, with the likes of Microsoft Corp. making billions of dollar of investment in AI data centers.