After reaching a high of $140 in June, Nvidia (NASDAQ: NVDA) Stocks have fallen amid a broader market sell-off and reports that Nvidia’s upcoming Blackwell chip may be delayed.
Despite everything, UBS is sticking to its $150 price target and “buy” rating on the stock. These price targets are typically just a guess as to where an analyst thinks a stock might trade in the near term. Based on the firm’s research, investors may be underestimating Nvidia’s earnings growth potential over the next few years.
Is Buying Nvidia Stock a Good Idea?
UBS believes early deliveries for Blackwell could be delayed until late January. However, it shouldn’t hurt Nvidia’s revenue in the short term, as it can sell more H200 graphics processing units (GPUs) to customers who use them for artificial intelligence (AI) until Blackwell is available.
The company sees strong commitment from AI researchers and growing demand from enterprises as positive indicators for Nvidia’s business. Indeed, the growing demand for training computers with AI shows no signs of slowing. AI models aren’t as sophisticated as they’ll be in 10 years, and the growing demand for AI training in the data center is the biggest driver of Nvidia’s revenue growth.
If Nvidia does confirm that Blackwell has delayed its August 28 earnings release, it could limit the stock’s gains and even trigger a temporary sell-off, as it would add new uncertainty to Nvidia’s business outlook.
UBS’s price target implies an upside of 27% from the current share price of $118, which would stretch Nvidia’s forward price-to-earnings ratio to an expensive 54. At these high stock prices, Wall Street traders will look for any excuse to take profits and sell, no matter how great Nvidia’s long-term growth prospects look right now.
Since there may be negative news that could impact Nvidia’s stock price in the near term, it may not hurt to wait to buy the stock until after the upcoming earnings reports.
Should You Invest $1,000 in Nvidia Now?
Before you buy Nvidia stock, here are some things to consider:
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John Ballard has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
1 Wall Street Firm Thinks Nvidia Shares Will Hit $150. Is It a Bargain? was originally published by The Motley Fool
