1 Wall Street Analyst Thinks Nvidia Stock Is Going to $1,150. Is It a Buy Around $865?

A new report from a Wall Street analyst maps out how Nvidia (NVDA 0.06%) stock could move in the coming months. UBS analyst Timothy Arcuri thinks the powerful Blackwell computing platform will start shipping this December. With that timeframe it's not too early for investors to look at what that might mean for Nvidia's revenue and earnings growth.

Most market watchers know just how far and fast Nvidia stock has jumped since it began showing how quickly it can monetize its artificial intelligence (AI) hardware and software products. Once sales of AI chips for data center needs took off, the stock has shot higher by about 500% since the start of last year.

Calculating Nvidia's fair value

In his recent report, Arcuri raised his price target for Nvidia shares from $1,100 to $1,150 and continued to recommend investors buy the stock. His new price target would mean a gain of about 33% from recent levels.

The first premise from Arcuri is that Nvidia's new Blackwell AI platform could start shipping to customers this December. That technology should be used in a diverse range of industries from advanced data centers and cloud infrastructure to automakers and other sectors for supercomputing needs.

Nvidia CEO Jensen Huang introduced it this way:

Blackwell is the engine to power this new industrial revolution. Working with the most dynamic companies in the world, we will realize the promise of AI for every industry.

The UBS analyst calculates his stock valuation using a bottom-up investing approach. His target price is based on a forecast for calendar year 2025 earnings of about $41 per share. The price target uses a price-to-earnings (P/E) ratio of 28 times those earnings.

The analyst's prediction appears highly plausible, especially given that Nvidia's fiscal fourth quarter earnings for the period ending January 28, 2024, surged by 486% compared to the same period the previous year. The Blackwell release should be the next major catalyst to drive earnings again next year. Nvidia's next quarterly results are due out on May 22.