UBS Lifts Price Target on NVIDIA (NVDA) to $205 Ahead of Earnings

NVIDIA Corporation (NASDAQ:NVDA) is one of the Hot AI Stocks to Keep on Your Radar. On August 21, UBS analyst Timothy Arcuri raised the price target on the stock to $205.00 (from $175.00) while maintaining a Buy rating. The firm is bullish on the stock ahead of earnings citing that “tailwinds remain strong.”

“We see overall demand signals as strong as ever (Oncor ~40GW of ‘high confidence’ new load requests for data center just in TX, though some of this may be 2x ordering to ‘get in line’) and expect NVDA’s commentary to reflect this very strong backdrop with commentary from GB200/GB300 rack partners suggesting 30k racks is doable this year with a strong CQ4 ramp.”

The firm is optimistic that the company could bring in a few billion dollars each quarter after reaching a deal with the US government, allowing it to sell H20 chips in return for 15% revenue.

“We see FQ2 (Jul) revenue in the ~$46B range (or a similar ~$1B beat to last Q) and see FQ3 (Oct) revenue guided to ~$54-55B excluding China, or as much as ~$57B if China is included. Our supply chain work on production suggests compute can grow ~20-25% Q/Q on a base of ~$35B in FQ2 – this alone should add $7-8B of compute revenue on a Q/Q basis for FQ3. We are a bit less clear on the networking portion of data center as some in the supply chain have called out shortages at 800G, though we still think networking revenue of ~$6B is do-able for FQ3 (up nearly $1B Q/Q). Ergo, total data center revenue of ~$49B seems reasonable for FQ3 while gaming is coming off such a strong FQ1 that comps are harder there. On China, there is likely some re-usable H20 inventory that had been written down, but we believe NVDA did place new Hopper wafer orders upon receipt of H20 license news and we still believe it is working on a Blackwell version as the US government likely (in our view) raises the ceiling of what is allowed to ship into China as part of its rare earth deal efforts.”

NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services.

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