UBS just raised the stakes on Nvidia, lifting its price target from $175 to $205 less than a week before the company reports second-quarter earnings.
The Swiss investment bank reaffirmed its buy rating on Thursday, saying Nvidia could post a $1 billion revenue beat for the quarter. That new target reflects nearly 17% upside from where shares closed on Wednesday.
UBS analyst Timothy Arcuri explained that demand for data center infrastructure is still soaring. In a note seen Thursday, Arcuri said, “We see overall demand signals as strong as ever,” citing around 40 gigawatts of new load requests for data centers in Texas alone.
He warned that some of that demand could involve duplicate orders just to secure queue spots, but he doesn’t expect that to weaken Nvidia’s outlook. He also mentioned that rack partners for Nvidia’s GB200 and GB300 chips are estimating that 30,000 racks could ship by the end of the year, with a big fourth-quarter ramp expected.
Arcuri said Nvidia could benefit from its recent deal with the U.S. government that allows it to sell H20 chips to China under strict conditions. Under this arrangement, 15% of revenue from those sales will go to the government.
He added that Nvidia probably still had H20 inventory that had been written down, and may now be able to reuse some of it. He believes the company has already placed new orders for Hopper wafers after getting the greenlight for the H20 license.
UBS thinks Nvidia is also working on a new Blackwell version of its chips, tailored for Chinese buyers. Arcuri believes this is in response to expected changes from Washington, where the government may raise the ceiling on what chips can be exported to China.
That potential shift is tied to ongoing talks about rare earth materials, which could loosen restrictions on chip exports as part of a larger trade arrangement.
Despite concerns over U.S.–China tensions, Arcuri said tailwinds for Nvidia remain strong. The bank is sticking to its forecast that billions of dollars could be added back to Nvidia’s earnings per quarter from this reentry into the Chinese market.
Wall Street is widely in agreement. Out of 65 analysts covering Nvidia, 58 have rated the stock a buy or strong buy, according to data from LSEG.
Shares have already jumped more than 30% in 2025, and on Thursday morning, the stock climbed nearly 1% in premarket trading. Nvidia will deliver its earnings report after markets close next Wednesday.
While banks are zeroing in on earnings, President Donald Trump is taking a different approach. On Thursday, Walter Isaacson, professor at Tulane University and author of a recent biography on Elon Musk, criticized Trump’s moves, calling them a “scattershot method of crony capitalism.”
Speaking to CNBC’s Squawk Box, Isaacson said, “That state capitalism often evolves into crony capitalism, where you have favored companies and industries that pay tribute to the leader, and that is a recipe for not only disaster, but just sort of a corrupt sense of messiness.”
He argued that Trump’s methods would not help rebuild U.S. manufacturing, instead unnecessarily interfering with how companies operate.
The comments followed a push by the Trump White House for a government stake in Intel, one of Nvidia’s major rivals. Earlier this month, Trump called Intel CEO Lip-Bu Tan “highly CONFLICTED” and demanded that he step down.
This all comes after Nvidia and Advanced Micro Devices (AMD) agreed to a 15% revenue-sharing agreement with the U.S. government on chips sold in China. That condition is tied to the export licenses now required for American chipmakers to continue shipping products to Chinese buyers.
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By Cryptopolitan
about 2 hours ago
