Following a peak of $140 in June, Nvidia (NASDAQ: NVDA) shares have experienced a decline amidst a broader market downturn and rumors of a potential delay in Nvidia’s upcoming Blackwell chip.
Despite these challenges, UBS remains bullish with a $150 price target and a “buy” rating on the stock. This target serves as an estimation of where an analyst believes the stock could trade in the short term. UBS’s analysis suggests that investors may be undervaluing Nvidia’s earnings growth potential in the coming years.
Is it a good time to invest in Nvidia?
UBS anticipates a possible delay in early shipments of Blackwell until late January. However, this setback is not expected to impact Nvidia’s revenue immediately, as the company can continue selling more H200 graphics processing units (GPUs) to AI customers until Blackwell becomes available.
The firm notes strong interest from AI researchers and growing enterprise demand as positive indicators for Nvidia’s business. The increasing need for AI training in data centers is a major driver of Nvidia’s revenue growth, as AI models continue to evolve.
However, if Nvidia confirms a Blackwell delay in its upcoming earnings report on Aug. 28, it could impact the stock’s performance and introduce uncertainty into Nvidia’s business outlook.
UBS’s $150 price target implies a 27% upside from the current $118 share price, resulting in a high forward price-to-earnings multiple of 54. At these levels, traders may be inclined to take profits and sell, regardless of Nvidia’s long-term growth potential.
Given the potential for short-term negative impact on Nvidia’s share price, it may be prudent to wait until after the earnings report to consider buying the stock.
Should you invest $1,000 in Nvidia now?
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John Ballard holds positions in Nvidia. The Motley Fool holds positions in and recommends Nvidia. The Motley Fool adheres to a disclosure policy.
1 Wall Street Firm Thinks Nvidia Stock Is Going to $150. Is It a Buy? was originally published by The Motley Fool