Nvidia stock moved higher early on Wednesday, even as broader markets struggled, after an analyst upgrade reinforced optimism around the chipmaker’s earnings outlook and long-term artificial intelligence positioning.
Nvidia shares rose about 1.5% to $191.84, outperforming major indices.
The gains followed a price target increase from analysts at UBS, who maintained a Buy rating on the stock.
Positive earnings setup ahead of GTC
UBS analyst Timothy Arcuri said the near-term setup appears constructive, citing resilient supply chain signals and a management team eager to address market scepticism.
“Given middling stock performance, supply chain signals that remain bullish, and a management team that seems frustrated with the prevailing doubts around growth and margin sustainability, the earnings set-up here seems positive — especially as we head toward GTC next month,” Arcuri wrote in a note to clients.
Investors have grown more cautious about Nvidia’s growth trajectory and the durability of its margins after several years of dominant performance in AI chips.
However, UBS said demand indicators remain firm heading into the company’s next earnings report.
Arcuri raised his target price on Nvidia to $245 from $235, reiterating a Buy rating.
Broadcom’s TPU push intensifies competition
At the same time, UBS highlighted rising competitive pressure from Broadcom, which has helped design Google’s Tensor Processing Units, or TPUs.
Nvidia has maintained a dominant position in AI chips for several years, benefiting from surging demand for GPUs used to train large language models.
However, as hyperscalers and AI developers seek more cost-efficient alternatives, competition in both training and inference markets has intensified.
TPUs have increasingly emerged as an intermediate option between traditional central processors and Nvidia’s graphics processing units.
“Many have turned to TPU as an intermediate alternative to GPU, and we believe demand is accelerating significantly,” Arcuri wrote.
He forecast that Broadcom will ship around 3.7 million TPUs this year, rising to more than 5 million in 2027.
UBS estimates this could help Broadcom generate approximately $60 billion in AI revenue in 2026 and $106 billion in 2027.
By comparison, Nvidia is expected to generate around $300 billion in data centre sales for its fiscal 2027 year, largely driven by GPU sales, according to FactSet data.
Arcuri maintained a Buy rating on Broadcom as well, with a $475 target price.
Nvidia’s response in inference
UBS said Nvidia could strengthen its position in inference through technology from privately held AI hardware start-up Groq.
Nvidia recently agreed to purchase a nonexclusive license for Groq’s technology, which focuses on inference hardware.
According to a report by The Wall Street Journal, Nvidia paid $20 billion for Groq’s technology, including compensation packages for employees who joined Nvidia.
Arcuri said concerns about gross margin sustainability have grown as investors debate the competitive threat posed by Google and Broadcom’s TPU offerings.
“We see nothing in the near-term to move us off Nvidia’s 75% gross margin guidance range, though investors have begun to question the sustainability of these levels given perceived threats from Google/Broadcom TPU—a debate Nvidia will surely address…especially in the context of the Groq deal,” he wrote.
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