UBS Reaffirms Buy on NVIDIA, $245 Price Target

UBS analyst Timothy Arcuri reiterated a Buy rating and $245 price target on NVIDIA (NASDAQ: NVDA).

“We met with NVDA CFO Colette Kress during our bus tour and came away bullish on NVDA’s networking growth and LT margins trajectory. NVDA suggested that hyperscalers are already planning 2027 compute capacity buildouts, with currently visible demand signals already suggesting that it will be another very strong year.

On hyperscaler capex sustainability, NVDA argued that both hyperscaler balance sheets and cash flows remain very strong, enabling leading players to invest ahead of revenue growth and AI operating profits – similar to the cloud buildout cycle of the last decade.

Management also sees financing mechanisms expanding from straight capex to leases, SPVs and other vehicles. NVDA sounded very bullish on its networking ramp (which is consistent with our earnings callback) with management suggesting it already measures as largest global networking player with ambition to exceed combined revenue for all other networking semis suppliers by the end of this year.

Finally, on GM, NVDA expects product performance advantages to support margins over time, but does not expect GM to expand beyond 75%. Net, we maintain our C2027E/2028E EPS estimates at ~$12.50/ ~$15 and our PT at $245, and we reiterate our Buy rating.”

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