An analyst projects Nvidia stock could reach $327 or higher within one year, betting that the company will continue to outpace Wall Street's earnings growth expectations as AI adoption remains in early stages.

What happened: An analyst set a 1-year price target for Nvidia stock of $327-plus, representing a 55%-plus gain from its closing price of $210.69 on June 18. A more conservative estimate of $305 (a 45% gain) was also offered, aligned with Wall Street's expected 5-year earnings growth rate of 45.5% annually.

Why it matters: The analyst argues that Nvidia's valuation is attractive because investors appear skeptical that the company's strong growth will persist, even though the AI revolution remains in its early stages. Nvidia's ecosystem of tools and platforms that developers have widely adopted makes its products "sticky," and the analyst sees no competitive threat from custom chips built by hyperscalers (large cloud providers) or from Advanced Micro Devices and Intel's data center chips.

What to watch: A potential significant upside driver is China. Nvidia stopped selling data center AI chips to China due to U.S. export controls, but the government eased restrictions on the H200 chip earlier this year. If Chinese companies resume purchasing Nvidia's H200 chips, it could provide "a notable boost" to both Nvidia's growth and stock price, though the magnitude depends on the scale of those sales.