UBS maintains Buy on NVIDIA stock with $185 target

On Monday, UBS analyst Timothy Arcuri confirmed a Buy rating on NVIDIA (NASDAQ:NVDA) shares, maintaining the $185.00 price target. According to InvestingPro data, NVIDIA boasts a perfect Piotroski Score of 9, indicating exceptional financial strength, while maintaining a robust market capitalization of nearly $3 trillion. Arcuri addressed the recent updates regarding Taiwan Semiconductor Manufacturing Company’s (TSMC) scaled-back expansion plans for its Chip on Wafer on Substrate (CoWoS) capacity by the end of 2025 and 2026. The anticipated capacity is now set at 70,000 and 110,000 wafers, down from the previous estimate of 80,000 and 120,000.

Arcuri suggested that the reduction in TSMC’s expansion plans is likely a result of improved yields in the CoWoS-L process rather than a reflection of decreased demand. This aligns with NVIDIA’s strong market position, as evidenced by its impressive 114% year-over-year revenue growth and 75% gross profit margin. Consequently, UBS’s projection for NVIDIA’s full-year GPU shipments remains largely intact at approximately 6.1 million units. However, there is a slight shift in the product mix, now favoring the B300/GB300 models more than previously anticipated.

In light of the updated product mix, UBS has adjusted its financial forecasts for NVIDIA. Revenue estimates for the first fiscal quarter (April) are now approximately $46 billion. Earnings per share (EPS) projections for calendar years 2025 and 2026 have been set at $5.27 and $6.22, respectively.

Despite the ongoing uncertainty surrounding the adoption and diffusion of artificial intelligence (AI) technologies, UBS remains optimistic about NVIDIA’s stock performance. The firm highlights that NVIDIA’s shares are currently trading at less than 20 times UBS’s estimated EPS for calendar year 2026, reinforcing their bullish stance on the company’s future prospects. InvestingPro analysis reveals 27 analysts have recently revised their earnings estimates upward, with comprehensive insights available in the Pro Research Report, which offers detailed analysis of NVIDIA among 1,400+ top US stocks.

In other recent news, Nvidia has been in the spotlight with several significant developments. The company is gearing up for its highly anticipated GTC 2025 conference, where it plans to focus on AI servers and unveil the B300 AI chip, which promises a substantial increase in performance and memory. This event is expected to address market concerns and potentially boost investor confidence. Nvidia has also announced a partnership with Microsoft (NASDAQ:MSFT) to integrate neural shading support into the DirectX platform, aiming to enhance gaming experiences by leveraging AI Tensor Cores in GeForce RTX GPUs.

Meanwhile, Mizuho (NYSE:MFG) Securities has adjusted its price target for Nvidia, lowering it from $175 to $168 while maintaining an Outperform rating, citing concerns over potential deceleration in AI growth rates. The firm emphasized Nvidia’s strong market position and innovative technology. Additionally, BofA Securities continues to support Nvidia with a buy rating and a price target of 200, highlighting the company’s potential ahead of the GTC conference.

Nvidia’s collaboration with Microsoft and its upcoming product announcements are expected to play a crucial role in shaping the company’s future trajectory. Investors are keenly watching these developments, particularly the GTC event, to gain insights into Nvidia’s strategic direction and technological advancements.

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