Here’s why Nvidia stock is up today

Nvidia (NASDAQ: NVDA) The stock posted significant gains in Monday’s trading. The artificial intelligence (AI) leader’s share price rose 4.1% in the daily session, according to data from S&P Global Market Intelligence.

Nvidia shares got a boost in trading today as investors and analysts reassessed the impact of a potential delay for the first generation of the company’s upcoming Blackwell processors. The company’s stock price also likely received a boost from the news that the graphics processing unit (GPU) leader signed a new AI training agreement with the state of California.

Nvidia continues to rack up earnings from the public sector

Nvidia promoted the importance of developing AI systems for countries. The company anticipates a dramatic increase in public sector spending to develop artificial intelligence systems as countries look to strengthen national defense capabilities and overall sovereignty. The announcement of the new training partnership with California reflects a similar dynamic at the US-state level. It wouldn’t be surprising to see Nvidia announce additional AI training agreements with other states in the near future.

Is Nvidia stock on track for higher gains?

UBS issued a report on Nvidia today, maintaining a buy rating on the stock and a one-year price target of $150 per share. Shares in the artificial intelligence leader have seen volatile trading recently as investors weighed concerns over expectations that its first Blackwell processors will be delayed. As the company closes today’s daily session valued at about $109 per share, UBS’s price target suggests near-term upside of about 38%.

The first versions of the Blackwell line are expected to offer a substantial leap forward in terms of processing power and were expected to be a major performance driver for Nvidia this year. Overall, the market has also shown some upset lately when it comes to valuations for megacaps and leading AI players. But the bank believes the tech stock is undervalued at current prices.

UBS expects a potential delay for the first Blackwell processors to still see them released until the end of January 2025, and the bank’s stock market analysts believe overall demand for Nvidia processors will remain very strong. While some analysts have forecast the AI ​​leader’s earnings to reach a near-term peak in 2025, UBS believes profits are likely to grow in 2026 as well.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

Here’s Why Nvidia Stock Jumped Today was originally published by The Motley Fool