UBS raises price target on AI ‘kingmaker’ NVIDIA

NVIDIA (NASDAQ:) is set to report earnings after the market close on August 23, 2023. Into the event, bull and bears have tangled about the 200% year-to-date stock surge on the AI craze. Today, analysts at UBS threw their hat into the ring with another price target hike, which follows the recent sell-off from the highs. UBS’s target goes to $540 from $475, offering 23% upside from Monday’s closing price.

“Investor expectations for F2025 (C2024) EPS have risen substantially, but we recommend investors stay the course here and remain bullish amid the recent pullback in the stock over the past month,” analysts commented. “Demand will dictate NVDA’s long-term AI revenue opportunity, but supply should be the primary determinant for its data center revenue at least through C2024.”

The analysts said they now see revenue “bogey” of around $14.5 billion for Q3 and see the company tracking to around $10 EPS this year and $17 next year.

“NVDA is quite literally serving as “kingmaker” as a huge wave of capital and new financing vehicles are chasing new AI software and specialized cloud infrastructure models (CoreWeave, Lamda Labs, etc..) while enterprises are still very early in a struggle to access enough capacity to build out AI at scale – this likely lasts well into next year,” the analysts added. “Even for more tactical investors, it still seems early to get off this train because Y/Y comps won’t get tough until year-end and the stock has rarely peaked prior to Y/Y comps peaking.”