Nvidia is poised to rise another 16% as signs point to ‘extremely robust’ demand for its next-generation Blackwell chip, says UBS

• UBS said Nvidia’s striking stock rally could continue to $150 per share.

• The bank said recent supply chain checks show “extremely robust” demand for Nvidia’s next-gen chips.

• Nvidia’s potential earnings per share of $5 in 2025 would give it a valuation of 25.6x based on its forward price-to-earnings ratio.

Nvidia According to UBS, shares’ eye-popping rally will continue as it benefits from strong demand for its next-generation chips that enable artificial intelligence.

The bank raised its 12-month price target for Nvidia stock from $120 per share to $150 per share on Monday, representing a potential upside of 16% from current levels.

Based on recent supply chain checks, UBS analyst Timothy Arcuri said that “demand momentum for Blackwell rack-scale systems remains extremely robust.”

Blackwell is Nvidia’s next generation AI-enabled GPU system which will replace the incredibly popular H100 chip later this year. The chip is expected to deliver significant efficiency gains compared to the Hopper chipset, and cloud hyperscalers are hungry for it.

“We now believe that EPS of ~$5 could be achievable for C2025 as the order pipeline for NVL72/36 systems is significantly larger than just two months ago as hyperscaler budgets increase for C2025,” Arcuri said.

If Nvidia posts earnings per share of $5 next year, it would trade at a price-to-earnings ratio of about 25.6x. Given the company’s rapid growth, that wouldn’t be a demanding valuation, as the S&P 500 trades at a price-to-earnings ratio of 21x.

And that’s the big difference between Arcuri’s estimates and the rest of Wall Street.

Sell-side consensus estimates expect Nvidia to post earnings per share of $3.62 in 2025, giving it a price-to-earnings ratio of 35x.

“Given all this, we believe a PT of $150 can be supported and maintain our Buy rating while increasing our valuation base from C2025 EPS to an average of C2025/C2026,” Arcuri said.

It also bodes well for more profits for Nvidia the growing ‘wall of worry’ that has surrounded stocks in recent weeks. That should ultimately lead to more gains as bearish concerns turn into bullish prospects amid solid earnings results.

“Sentiment on the shares – while still strong – has faded somewhat in recent weeks, creating more of a ‘wall of worry’ that should ultimately be healthy if our outlook materializes,” Arcuri said.

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