Bullish indicating open at $55-$60, IPO prices at $37
On Thursday, UBS analyst Timothy Arcuri reiterated a Buy rating on NVIDIA (NASDAQ:NVDA) with a steady price target of $185.00, aligning with the broader Wall Street consensus. According to InvestingPro data, analyst targets range from $120 to $220, with a strong consensus rating of 1.34 (Buy). Arcuri’s assessment followed a review of the company’s recent performance and future outlook, particularly highlighting the progress of NVIDIA’s Blackwell project.
NVIDIA’s Blackwell project is advancing ahead of schedule, surpassing even UBS’s optimistic forecast, which was already the highest among Wall Street expectations. This rapid development is seen as a key indicator of NVIDIA’s potential growth. The company’s strong market position is reflected in its perfect Piotroski Score of 9, as reported by InvestingPro, indicating excellent financial strength and operational efficiency. Additionally, the company’s commitment to controlling operating expense growth this year is viewed as a sign of confidence in its continued expansion.
Despite gross margins being slightly below expectations, Arcuri believes this is due to a significant shift in product mix in the first fiscal quarter of April. Blackwell is projected to account for over 60% of NVIDIA’s revenue during this period. The company aims to return gross margins to mid-70% levels by the end of the year.
Arcuri’s commentary also touched on NVIDIA’s guidance of $43 billion, which suggests there may be room for further upside. Based on UBS’s supply chain analysis, the firm anticipates NVIDIA’s earnings per share (EPS) to be in the low to mid $5 range this year, with the potential to reach $6-6.50 in the following year. The analyst underscored the robust demand for computing power in the AI industry, where NVIDIA continues to play a pivotal role.
In other recent news, NVIDIA’s financial performance and analyst reactions have captured significant attention. Citi analysts reiterated a Buy rating with a $163 price target, noting NVIDIA’s January and April-quarter sales slightly exceeded expectations at $39 billion and $43 billion, respectively. However, NVIDIA’s gross margin outlook fell short of forecasts, attributed to the initial Blackwell product mix, though improvements are anticipated by year-end. Wolfe Research maintained an Outperform rating with a $180 price target, emphasizing NVIDIA’s sustainable performance without one-time revenue boosts. Bernstein raised its price target from $175 to $185, highlighting NVIDIA’s successful navigation of production challenges and high demand for its Blackwell line. Summit Insights Group downgraded NVIDIA to Hold from Buy, citing concerns over the risk-reward balance and potential market dynamics affecting future performance. Meanwhile, Truist Securities increased its price target to $205, acknowledging key operational developments and a positive outlook for NVIDIA’s growth trajectory. These recent developments reflect a mixed yet generally optimistic view of NVIDIA’s financial health and market position.
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