Nvidia: UBS recommends investors profit from dip
(CercleFinance.com) - On Thursday UBS renewed its Buy recommendation on Nvidia shares, with a $150 target price, recommending investors to take advantage of the weak quarterly results to buy the stock.
cp: $117.6, -6.4%.
The broker acknowledges that the US AI giant's sales forecast of around $32.5bn for the current quarter is slightly below Wall Street estimates.
It also points to the prospect of a decline in gross margin for the quarter - which ends in January 2025 - due to the lower profit margins generated by the next-generation Blackwell processor as a result of the complexity of its design.
However, UBS points out that the Californian group has reported a significant increase - for the first time in many quarters - in its purchase commitments and supply obligations, an encouraging element in its view.
From UBS' viewpoint, these two indicators should be watched closely as they herald future growth in the company's business.
These figures climbed by around 40% from one quarter to the next (i.e. a total of almost ten billion dollars), after having risen by only 15% in the previous quarter and having remained stable in the one before that, the professional says.
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