Despite its 120% surge so far in 2020, NVIDIA (NVDA 9.32%) is poised to deliver even more gains to investors in the months ahead. 

So says Needham analyst Rajvindra Gill. On Tuesday, he reiterated his buy rating on NVIDIA's stock and boosted his price forecast from $600 to $700. That's about 35% higher than its current price near $517. 

A digital bull is climbing an upwardly sloping stock chart.

Analysts are growing increasingly bullish on NVIDIA's shares. Image source: Getty Images.

Gill applauded the graphics-card maker's $40 billion deal to acquire fellow chipmaker ARM Holdings from Japanese conglomerate Softbank, which he says will bolster its artificial intelligence capabilities. "Strategically, we believe the Nvidia-Arm combination will create the leading AI computing platform in the semiconductor industry," Gill said. 

In turn, Gill estimates that acquiring ARM could increase NVIDIA's annual earnings per share by as much as $1.65 by 2022. 

Will NVIDIA's stock price hit $700?

The merger with ARM will face intense regulatory scrutiny, so there can currently be no assurances that it will be completed. But if it does receive regulatory approval, NVIDIA's combination with ARM would be a game changer for the tech industry. Pairing NVIDIA's AI and graphics processing technology with ARM's central processing unit designs and vast device ecosystem would position the combined company as a leader in cloud computing, 5G communications, the internet of things, and a host of other high-growth markets. 

Moreover, NVIDIA said it expects the merger to be immediately accretive to its profits upon closing, so Gill's EPS estimates seem reasonable. Adding $1.65 to Wall Street's current earnings projections for NVIDIA would equate to $12.67 in EPS in 2022. At $700 per share, the tech titan would trade for about 55 times those earnings estimates. While rich, that valuation is certainly achievable, considering that NVIDIA currently trades for 57 times forward earnings projections for 2021.