July 14, 2024
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Get ready to cash in on Nvidia’s next-gen Blackwell chip – UBS predicts 16% surge ahead!

Get ready to cash in on Nvidia’s next-gen Blackwell chip – UBS predicts 16% surge ahead!

The technology industry has been abuzz with excitement over Nvidia’s impressive stock rally, and according to UBS, this upward trend shows no signs of slowing down. Here’s why Nvidia’s stock could reach $150 per share and continue its ascent:

  • Recent supply chain checks reveal a strong demand for Nvidia’s next-generation chips, particularly the Blackwell rack-scale systems. These AI-enabled GPU systems are predicted to replace the popular H100 chip later this year, promising efficiency gains and heightened performance capabilities.

  • UBS analyst Timothy Arcuri is optimistic about Nvidia’s potential, estimating that the company could achieve earnings per share of approximately $5 by 2025. With this projection, Nvidia would be trading at a forward price-to-earnings ratio of around 25.6x, a reasonable valuation considering its rapid growth rate.

  • This estimate stands in contrast to the sell-side consensus, which expects Nvidia to deliver earnings per share of $3.62 in 2025, resulting in a higher forward price-to-earnings multiple of 35x. Despite this discrepancy, UBS maintains a “Buy” rating on Nvidia stock, with a price target of $150 per share.

  • Another factor contributing to the positive outlook for Nvidia is the recent shift in sentiment towards the stock. While still strong, sentiment has softened in recent weeks, creating a “wall of worry” that could fuel further gains as bearish concerns give way to bullish optimism fueled by solid earnings results.

In conclusion, Nvidia’s stock rally shows no signs of slowing down, with strong demand for its next-gen chips and optimistic earnings projections driving the price target to $150 per share. As investors navigate the evolving landscape of the tech sector, Nvidia remains a standout player poised for continued growth in the coming years.

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