UBS Waves the Bull Flag on Nvidia Stock

Nvidia (NASDAQ:NVDA) stock has climbed 43% this year as the AI chip giant continues to capitalize on surging AI infrastructure demand and its dominant position in data-center hardware. Its growth narrative remains intact despite export restrictions and broader tech volatility, thanks to solid earnings, strong customer commitments and strategic alliances.

With Nvidia’s success being an essential part of the AI-driven bull market, Wall Street will naturally be keen to find out how things have been shaping up at the chip colossus and what’s next in the pipeline when the company reports FQ3 earnings next Wednesday (November 19).

Among those watching closely is UBS’s Timothy Arcuri, who’s waving the bull flag. Ranked 5th among thousands of Wall Street stock experts, Arcuri expects fiscal Q3 (October) revenue of roughly $56 billion, above the $54 billion guide and in line with Nvidia’s typical $2 billion beat before the China ban. For FQ4, he sees $63–64 billion as a “reasonable revenue bogey,” backed by several “favorable tailwinds.” Yet, with current production and inventory levels, Arcuri believes Nvidia has over $5 billion of “headroom” and could guide several billion higher. His model calls for about $66 billion in FQ4 revenue.

While some investors have expressed concern about the effect of rising memory and component costs on gross margins, Arcuri remains comfortable with his forecast of 73.5% for FQ3 and 74.5-75% for FQ4. The analyst also expects Nvidia to signal that it can sustain mid-70% gross margins through 2026.

Arcuri also understands the view that the “surprise” element for 2026 EPS could now be limited after the backlog disclosure at GTC, which he interprets as pointing to around $9 in EPS for that year, but there could still be upside if the company can secure additional CoWoS capacity. Based on this, even a sizable guidance beat for FQ4 likely wouldn’t qualify as “new” information for most investors, given what’s already implied by the backlog.

Regarding China, following the Trump Administration’s decision to block shipments – approval of which would have opened up another significant growth avenue – the issue seems largely settled for now, though it could still resurface in the future. That leaves the question of how Nvidia plans to handle its existing B30 inventory.

Lastly, Arcuri thinks a major focus of the call will obviously be the pace at which AI infrastructure can be deployed, as well as any potential customer concentration risks that could emerge.

Bottom line, Arcuri assigns NVDA shares a Buy rating, backed by a $235 price target. The implication for investors? Upside of ~22% from current levels. (To watch Arcuri’s track record, click here)

And he’s far from alone. Apart from one Hold and one Sell, every other recent analyst covering NVDA – 37 in total – is bullish, giving the stock a Strong Buy consensus rating. Meanwhile, the average price target of $238.29 points to a potential 24% gain from here. (See NVDA stock forecast)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.