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UBS maintains Buy rating on NVIDIA stock

EditorAhmed Abdulazez Abdulkadir
Published 2024/05/15, 17:26
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On Wednesday, UBS reiterated its Buy rating on NVIDIA Corporation (NASDAQ:NVDA) with a consistent price target of $1,150.00. UBS forecasts that NVIDIA could report first-quarter revenue up to $26 billion, with the data center segment contributing approximately $22-23 billion. The firm also anticipates NVIDIA may guide towards total revenue of about $27-28 billion for the following quarter, with data center sales estimated around $25-26 billion.

The analyst from UBS addressed investor concerns regarding a potential "air pocket" in revenue during the October/January period due to the initial shipment timing of NVIDIA's Blackwell product in mid-December. UBS believes these concerns are exaggerated, citing recent customer discussions and supply chain analysis that indicate sustained demand for NVIDIA's Hopper products through the end of the year.

UBS also predicts robust demand for NVIDIA's forthcoming GB200 systems, having significantly increased its revenue and earnings per share (EPS) estimates for fiscal year 2026/calendar year 2025 to approximately $175 billion and $41, respectively. These projections are based on a strong mix of GB200 systems sales expected next year. According to UBS, while sell-side estimates for calendar year 2025 appear conservative, most investors' EPS expectations are in the high-$30s, still below UBS's revised figures.

The firm suggests that, given the strong demand outlook, there could be another considerable rise in NVIDIA's aggregate purchase commitments, following a relatively unchanged figure in the previous quarter. UBS's stance on NVIDIA remains bullish, with the price target of $1,150 reaffirmed, reflecting confidence in the company's revenue growth and market position.

InvestingPro Insights

As UBS maintains a bullish stance on NVIDIA Corporation (NASDAQ:NVDA), the latest data from InvestingPro aligns with the optimism surrounding the company's growth prospects. NVIDIA's impressive revenue growth over the last twelve months, reported at a staggering 125.85%, underscores the company's expanding market presence. The company's operating income margin during the same period stands at a robust 54.12%, indicating efficient management and profitability.

InvestingPro Tips highlight NVIDIA as a prominent player in the Semiconductors & Semiconductor Equipment industry, with analysts anticipating sales growth in the current year. Furthermore, the company's stock has shown a strong return over the last three months, with a 25.74% increase, and an even more remarkable year-to-date price total return of 84.48%. These metrics suggest that NVIDIA is well-positioned in the market, with potential for continued growth.

For investors interested in a deeper dive into NVIDIA's financial health and future, there are additional InvestingPro Tips available, which can be accessed through the InvestingPro platform. Subscribers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. In total, there are 21 more InvestingPro Tips awaiting those who wish to further explore NVIDIA's investment potential.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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