UBS Raises Price Target on NVIDIA to $205 Ahead of Earnings

UBS analyst Timothy Arcuri has raised the price target on NVIDIA (NVDA) to $205, citing strong demand signals and optimism about the company's Q3 earnings. The firm expects NVIDIA to bring in a few billion dollars each quarter after reaching a deal with the US government to sell H20 chips. UBS sees FQ2 revenue at ~$46B and FQ3 revenue at ~$49B, with a total data center revenue of ~$49B.

UBS analyst Timothy Arcuri has raised the price target on NVIDIA (NVDA) to $205, citing strong demand signals and optimism about the company's Q3 earnings. The firm expects NVIDIA to bring in a few billion dollars each quarter after reaching a deal with the US government to sell H20 chips. UBS sees FQ2 revenue at ~$46B and FQ3 revenue at ~$49B, with a total data center revenue of ~$49B.

Arcuri's new target reflects a significant increase from the previous estimate of $175, indicating a strong belief in NVIDIA's financial performance. The analyst attributes this optimism to robust demand signals, particularly in the data center sector. Arcuri expects NVIDIA to deliver another beat in its upcoming Q2 earnings report, projecting revenue to be $1 billion higher than current forecasts [1].

The deal with the US government for H20 chip sales in China is also expected to boost NVIDIA's data center revenues. The company has resumed H20 chip sales to China, with 15% of the revenues going to the U.S. government. This arrangement is seen as a significant tailwind for NVIDIA, potentially adding billions of dollars to its earnings per quarter [2].

The average price target on Wall Street stands at $196.65, suggesting a potential upside of 12.12% from the current price. Analysts' consensus recommendation from 65 brokerage firms indicates an "Outperform" status, with the average target price for NVIDIA being $195.98 [1].

GuruFocus estimates the estimated GF Value for NVIDIA in one year to be $290.99, suggesting an upside of +67.85% from the current price of $173.37 [1]. The global generative AI market size is anticipated to reach $967.6 billion by 2032, with a CAGR of 39.6% from 2024 to 2032, further driving demand for NVIDIA's AI chips [2].

References:
[1] https://finance.yahoo.com/news/nvda-buy-nvidia-stock-aug-192124545.html
[2] https://www.tradingview.com/news/zacks:0a217645e094b:0-nvidia-likely-to-beat-q2-earnings-estimate-how-to-play-the-stock/