After reaching a peak of $140 in June, Nvidia ( NVDA 4.05% ) Stocks have decreased in value due to a general decline in the market, as well as news that Nvidia’s new Blackwell chip release could be postponed.
Nevertheless, UBS It is maintaining its price target of $150 and a recommendation to “buy” the stock. Price targets are typically projections of where analysts believe a stock could be valued in the short term. According to the company’s analysis, investors may not fully appreciate the earnings growth possibilities of Nvidia in the coming years.
Should one consider purchasing Nvidia stock?
UBS predicts that there could be a delay in the early deliveries of Blackwell until the end of January. Nevertheless, this setback is not expected to negatively impact Nvidia’s earnings in the short run, as they have the opportunity to increase sales of H200. units for processing graphics addressing clients who are employing them machine intelligence until Blackwell is ready.
The company views the strong dedication of AI researchers and increasing interest from businesses as a favorable sign for Nvidia’s operations. The continuous rise in demand for utilizing AI to train computers remains steady. Despite current AI models not being as advanced as they will be in a decade, the increasing need for AI training within data centers stands out as the main factor fueling Nvidia’s revenue expansion.
However, should Nvidia officially announce a postponement of Blackwell in its upcoming release. financial results On August 28, this event may restrict the increase in the stock price and could potentially lead to a temporary decrease in value, as it would bring in a new element of uncertainty to Nvidia’s future business prospects.
The price target set by UBS suggests a potential 27% increase from the current share price of $118 for Nvidia. price-to-earnings ratio that uses future earnings estimates At a high price of 54 dollars, traders on Wall Street will be eager to sell and make a profit, regardless of how promising Nvidia’s future growth may seem.
Considering the possibility of adverse news affecting Nvidia’s stock price soon, it may be wise to hold off on purchasing the stock until after the upcoming earnings report.
