To The Moon

UBS analyst Timothy Arcuri believes that NVDA will hit $350 per share in the next twelve months. Here is why.

With its shares down nearly 30% since reaching their all-time high in late-November last year, Nvidia had been suffering from bearishness towards tech and growth stocks, which has in turn been prompted by macroeconomic fears, increasing interest rates, and high inflation.

At its all-time high, Nvidia achieved a market cap that exceeded $800 billion. It seemed poised to join the elite group companies sporting $1T+ market caps. While it’s market cap fallen since then, it may be given another bite at the apple soon.

Indeed, despite NVDA’s dreary performance to start the year, Wall Street remains optimistic on Nvidia for 2022. Soon after Nvidia wrapped up its participation in CES 2022 (often considered to be the most influential tech event in the world), the Swiss bank UBS recently reiterated its “buy” recommendation on the company.

Figure 1: NVIDIA Omniverse™ Platform

Nvidia stock is a top UBS pick for 2022

In late December of 2021, UBS named Nvidia as its top pick for the year 2022. According to the Swiss bank, Nvidia had achieved the status of “semiconductor titan” and was quickly establishing itself as a powerful force within the rapidly-growing GPU market.

With Nvidia poised to benefit from the rise of markets such as gaming and data centers, the company is likely to continue growing at an impressive clip, at least in the near future. UBS has a $350 price target for NVDA, which implies a 50% upside over current levels and a 23% upside above NVDA's historical peak.

The market reacted positively to UBS's nomination of Nvidia as its top pick for 2022 - NVDA shares rose almost 5% the day after the announcement was made.

Omniverse opportunities in the Metaverse

The latest and most recent rating from UBS comes from analyst Timothy Arcuri. He reiterated his bullishness on Nvidia shares, citing the monetization potentials and value opportunities of the company’s Omniverse platform. His opinion was informed by discussions with some of Nvidia’s customers and channel partners as well as industry experts in the emerging 3D/VR/AR content market.

While stating that it may take a while for momentum to build, Arcuri estimates that, "ultimately," Omniverse has $100 billion in total available market potential for Nvidia. It is worth pointing out that,according to third-party research firms, the Metaverse’s market size reached $44.69 billion in 2020 and is predicted to reach $596.47 billion by 2027 at an impressive CAGR of 44%.

During CES 2022, NVIDIA Enterprise Division Director for Latin America, Marcio Aguiar, reinforced the company’s commitment to joining the new era of simulation designs.

"In recent years, NVIDIA has been expanding the applicabilities of the Omniverse and bringing a number of benefits to different areas that need the technology for their demands. By 2022 we will enter a new era of collaboration and simulation designs, and these new features are just a sample of what's to come,"

Consensus is also bullish on NVDA

Despite its shares dropping more than 30% since their peak at the end of November, Wall Street experts continue to forecast a generous upside in the near future for NVDA. The consensus rating on the stock is a “strong buy,” and the average price target is $359.17, implying 52% upside over the next twelve months.

Below, we list the most recent ratings provided by Wall Street firms:

Citigroup added the chipmaker to the firm's “catalyst watch list” on January 6, having been encouraged by management's virtual address at CES 2022. The bank also expects an upside within 90 days and has a $350 price target on NVDA.

Truist Financial has also a $350 price target on Nvidia, which itreiteratedrecently after the company’s announcement of new products and partnerships across the gaming, professional visualization, and automotive markets. Truist sees all of these developments as reinforcing Nvidia’s long-term upside potential.

Finally, Bank of America, with a $375 price target – implying a 60% upside – is optimistic about NVDA’s sales growth for 2022. The bank sees 25 to 30% year-over-year growth as possible - that’s against a consensus estimate of 19% and Nvidia’s own estimate of 21%.