UBS has expressed increased confidence in Nvidia ahead of the chipmaker's upcoming quarterly earnings report, raising its price target for Nvidia shares from $245 to $275, which suggests a potential upside of 22% based on the stock's closing price on Wednesday.
Analyst Timothy Arcuri noted a general apathy among investors towards Nvidia, despite high interest, indicating that the conditions are favorable for a positive earnings report and possibly good news regarding capital returns.
UBS anticipates that Nvidia's revenue for the first quarter of 2027 will reach approximately $81 billion, surpassing the $79 billion forecasted by analysts surveyed by FactSet. The firm also expects Nvidia to provide guidance for revenues between $90 billion and $91 billion. The earnings report is scheduled for release on Wednesday after market close.
Arcuri highlighted that much of Nvidia's growth is expected to stem from its data center segment, particularly from the upcoming Vera Rubin Platform, a next-generation AI supercomputing platform and GPU microarchitecture set to launch in the latter half of this year.
Nvidia's stock has seen significant gains recently, rising over 29% in the second quarter, driven by momentum in the artificial intelligence sector following the introduction of Anthropic's Mythos model. Currently, Nvidia holds the position of the largest company in the S&P 500 by market capitalization, exceeding $5 trillion.
UBS's bullish stance aligns with the broader market sentiment, as 57 out of 61 analysts covering Nvidia have rated the stock as a buy or strong buy