RBC Initiates NVIDIA at Outperform on Sustained AI Spending Outlook

NVIDIA (NASDAQ: NVDA) was initiated with an Outperform rating and a $240.00 price target by RBC Capital Markets.

RBC said investor debate around NVIDIA largely centered on the sustainability of AI infrastructure spending and competitive pressures. The firm expected cloud capital expenditures to remain elevated over the next 12 to 18 months, driven by intense competition among the four largest hyperscalers, which it noted were well capitalized.

The analyst cited NVIDIA’s backlog exceeding $500 billion, accelerating inference demand, and expanding enterprise AI adoption as reinforcing confidence in the company’s growth outlook. Any slowdown in spending was expected to be gradual, with sovereign projects and China-related demand acting as potential offsets.

RBC said it was not overly concerned about competitive threats, pointing to NVIDIA’s full-stack performance leadership, ecosystem strength, and balance sheet flexibility. The firm also highlighted valuation, noting the stock traded at roughly a 20% discount to both semiconductor peers and large-cap technology companies.