D.A. Davidson Upgrades Nvidia to Buy, Raises Target to $210 as AI Compute Demand Drives NVDA's 32% YTD Rally

D.A. Davidson moved Nvidia (NASDAQ: NVDA) up the pecking order on Thursday, upgrading the chipmaker from neutral to buy and nudging its price target to $210 from $195. The call comes from analyst Gil Luria, who framed the upgrade around one clear point: demand for AI compute is still ramping and that demand is the key driver.

Luria's argument is straightforward. He sees AI-driven compute needs expanding beyond the data-center stack and into how work gets done - which, in his view, creates sustained demand even before enterprises see clear ROI. That's the thesis behind the upgrade: more compute, more GPUs, more tailwinds for Nvidia.

He doesn't ignore the negatives. Competition is intensifying, China remains an uncertain demand patch, supply-chain pinch points could pop up, and expectations are admittedly frothy. Still, Luria concluded that the sheer growth in compute demand overwhelms those risks - essentially betting that volume and pricing for chips will carry the story for the next couple of years.

He also drew a contrast with Apple (NASDAQ: AAPL), labeling it a laggard in the AI race and saying he prefers an offensive posture focused on AI compute. Plain talk: D.A. Davidson wants a piece of what it calls "the heart of the AI trade."

The market reacted modestly. Nvidia shares, which are up about 32% year-to-date, ticked higher in the premarket after the note landed. On the sell side, Luria stopped short of fully embracing consensus estimates - he expects investors to be tolerant of small misses the way they've been in recent quarters.

What this upgrade changes in practice is mainly sentiment and the sell-side bar. An elevated price target and a buy rating from a visible shop can shift expectations and impact short-term flows, even if the underlying fundamentals and risk profile haven't suddenly altered.

If you like a neat takeaway: D.A. Davidson is putting Nvidia at center stage of the AI hardware story, with a $210 target and a view that compute demand will keep the momentum rolling - at least for now. Will the rest of the market agree? NVDA's YTD gain is one early answer.