UBS predicts Nvidia will surge another 16% due to strong demand for next-gen Blackwell chip

Nvidia Stock’s Rally Poised to Continue, UBS Says

Nvidia has been on a tear, and according to UBS, the stock’s eye-popping rally is not over yet. The bank recently raised its 12-month price target on Nvidia to $150 per share, citing strong demand for the company’s next-generation artificial intelligence-enabling chips.

Recent supply chain checks have shown “exceedingly robust” demand for Nvidia’s new Blackwell rack-scale systems, which are set to replace the popular H100 chip later this year. These chips are expected to deliver significant efficiency gains compared to the Hopper chipset, and cloud hyperscalers are eagerly awaiting their arrival.

UBS analyst Timothy Arcuri believes that Nvidia could achieve earnings per share of $5 by 2025, which would give the company a forward price-to-earnings ratio of about 25.6x. This valuation, considering Nvidia’s fast growth rate, is not unreasonable compared to the S&P 500’s multiple of 21x.

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The sell-side consensus estimates for Nvidia’s earnings per share in 2025 are lower, at $3.62, resulting in a higher forward price-to-earnings multiple of 35x. However, Arcuri’s optimistic outlook on Nvidia’s potential growth justifies the higher price target.

In addition to strong demand for Nvidia’s chips, the “wall of worry” surrounding the stock in recent weeks could actually be a positive catalyst for further gains. As bearish concerns are converted to bullish outlooks, Nvidia could see even more upside.

At Extreme Investor Network, we are excited to see the continued success of Nvidia and are confident in the company’s ability to deliver long-term value to investors. Stay tuned for more updates on this exciting investment opportunity.