UBS Reiterates Buy on NVIDIA, $205 Price Target

UBS analyst Timothy Arcuri reiterated a Buy rating and $205 price target on NVIDIA (NASDAQ: NVDA).

“While timing will, to a large degree, depend on OpenAI’s ramp plan, we estimate this deal ultimately translates into ~$400B of NVDA revenue over a multi-year period.

Given the sheer size of the numbers, it does seem likely there could be some overlap with Oracle’s capacity allocated to OpenAI, but our conversation with management suggested this is largely incremental.

For NVDA, this helps to flesh out multi-year visibility to the substantial growth headroom it laid out last earnings call when it highlighted a $3-4T TAM by 2030 (of which NVDA’s share has been ~30-35%) and we believe it was OpenAI approaching NVDA for help rather than any sort of vendor financing effort on the part of NVDA.

As for AVGO, this could ultimately impact the size of its ASIC revenue from OpenAI, but we have seen no signs of any weakening in what we believe to ultimately be a volume target bigger than what Google does with AVGO.

Ultimately, this feels the most negative for AMD as it solidifies NVDA’s market dominance.”

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