NVIDIA Corp (NASDAQ:NVDA, ETR:NVD) was a key driving force on Wall Street on Monday after UBS upped its target price, based on supply chain checks.
Investor sentiment about the chip giant “has faded somewhat in recent weeks”, creating more of a 'wall of worry'.
However, based on the data suggested by the supply chain checks, demand momentum for Nvidia's new Blackwell AI chips "remains exceedingly robust", with the order pipeline for AI-enabling NVL72/36 systems "materially larger than just two months ago" as 2025 budgets from 'hyperscaler' cloud companies are increasingly firmed up.
Demand for these rack-scale systems is in part being driven by their better power efficiency, the UBS analysts said, compared to traditional server systems, while also coming against a backdrop of tightening bottlenecks in power generation infrastructure.
Nvidia is also launching a Blackwell Ultra in 2025 as, the analyst said, the company "continues its tick-tock cadence of major platform releases every two years (with the next after Blackwell to be Rubin), interspersed with mid-cycle platform 'Ultra' updates.
UBS has raised its 2025 revenue and EPS estimates by 12% to roughly $204 billion and 15% to $4.95, which it notes is far above the sell side consensus of $161 billion and $3.62.
Given all of this, analysts have hiked their share price target to $150 from the prior $120, maintaining a 'buy' rating.