UBS reiterated its Buy rating on Nvidia (NASDAQ:NVDA) stock and kept a price objective of $235.00, citing recent Taiwan export data for Automatic Data Processing equipment (ADP) as a favorable indicator ahead of the company's next financial report.
According to InvestingPro figures referenced by UBS, Nvidia is trading slightly below what is classified as its Fair Value, with a price-to-earnings ratio of 46.95 and a price/earnings-to-growth (PEG) ratio of 0.79. The broader analyst consensus for Nvidia remains strongly positive, recorded at 1.35 on the scale, which indicates a Strong Buy stance among analysts.
Taiwan's Ministry of Finance published January export statistics showing ADP exports excluding laptops totaled $22.6 billion, an increase of 8% month over month from December's $20.9 billion. UBS noted this rise runs counter to typical seasonal patterns, where ADP exports generally decline roughly 4% month to month.
UBS analyst Timothy Arcuri highlighted that the elevated export run rate, which began in October at $22.2 billion versus September's $14.1 billion, has largely held steady through December and January with little monthly fluctuation. For the full fiscal fourth quarter, Taiwan's ADP exports reached $66.2 billion, a 25% quarter-over-quarter increase. That follows a 31% increase in the prior quarter and surpasses UBS's internal projection of 18% quarterly growth for Nvidia's data center revenue.
UBS also pointed out that Semiconductor Industry Association (SIA) data for December arrived above typical seasonal trends. In addition, TSMC's January sales figures were expected to be released on Friday - data UBS said could provide further clarity on Nvidia's supply-chain and demand dynamics.
Beyond macro and industry metrics, the bank's note summarized a series of recent developments involving Nvidia. The company has raised concerns with the Trump administration, arguing that newly proposed chip export rules to China are overly restrictive and could dampen demand from potential customers such as Alibaba and ByteDance. Separately, Nvidia's planned sale of H200 chips to ByteDance has hit obstacles because of conditions set by the U.S. government that Nvidia has not agreed to.
On the technology partnerships front, Tower Semiconductor announced a collaboration with Nvidia to advance silicon photonics for AI data centers, an effort aimed at improving data rates and bandwidth for AI infrastructure. In the financial markets, Apollo Global Management is reported to be close to finalizing a $3.4 billion loan arrangement to buy Nvidia chips for leasing to Elon Musk's xAI - Apollo's second major investment in that area.
Analyst activity remains constructive. Goldman Sachs reiterated its Buy rating on Nvidia, setting a $250 price target and forecasting a strong quarter driven by favorable supply and demand indicators.
Taken together, UBS framed the Taiwan export strength and industry data as constructive signals for Nvidia's near-term outlook while also cataloguing regulatory and commercial frictions that could influence future demand and deal execution.
Key points
- UBS maintains a Buy rating on Nvidia with a $235 price target, citing strong Taiwan ADP export data as supportive for Nvidia's upcoming results.
- Taiwan ADP exports (excluding laptops) were $22.6 billion in January, up 8% month over month, and full-quarter ADP exports reached $66.2 billion - a 25% sequential rise.
- Other notable developments include regulatory disputes over chip exports to China, a stalled H200 sale to ByteDance, a silicon photonics collaboration with Tower Semiconductor, and Apollo's near-completion of a $3.4 billion chip purchase loan for leasing to xAI.
Risks and uncertainties
- Regulatory risk - New U.S. chip export rules to China are a source of dispute and could constrain demand from Chinese customers, affecting semiconductor and cloud services sectors.
- Commercial execution risk - The H200 sale to ByteDance faces unresolved U.S. government conditions, which could impede specific sales and revenue realization in the data center and AI infrastructure markets.
- Data dependency - Market interpretation of Nvidia's near-term outlook is influenced by third-party metrics such as Taiwan ADP exports and upcoming TSMC sales figures; any revisions to those data points could change analysts' assessments.