UBS Group noted in its latest research report that NVIDIA's current earnings release environment remains "favorable."
With the listing of $NVIDIA (NVDA.US)$ As NVIDIA is set to release its financial report for the fourth quarter of the fiscal year 2026, UBS Group highlighted in its latest research report that the backdrop for this chip giant’s earnings release remains "favorable." UBS analysts pointed out that despite recent market concerns over the sustainability of AI hardware demand and margin compression, which have kept NVIDIA's stock performance relatively flat, such sentiment has actually lowered expectations for the upcoming earnings release, setting the stage for potential outperformance and a rebound in share price. Analyst Timothy Arcuri reiterated a "Buy" rating and raised the target price from $235 to $245.
In a client note, Arcuri wrote: "Given the lukewarm stock performance, still optimistic supply chain signals, and management’s apparent frustration with widespread skepticism about growth and margin sustainability, the backdrop for this earnings report appears positive—especially as we approach the GTC conference next month."
UBS’s optimistic confidence in NVIDIA’s earnings mainly stems from strong supply chain signals and capacity ramp-ups for key products. Based on the bank’s analysis of January export data from the Asian supply chain, particularly from Taiwan, exports of Automatic Data Processing-related equipment achieved counter-seasonal growth, directly reflecting robust global demand for AI infrastructure in data centers.
Meanwhile, production capacity for NVIDIA’s next-generation Blackwell architecture chips is in an accelerated expansion phase, with UBS forecasting that this series will contribute approximately $9 billion in revenue in the fourth quarter, becoming the core growth driver for surpassing earnings expectations.
In terms of financial expectations, UBS demonstrated a more optimistic stance than the market consensus. The bank forecasts NVIDIA’s fourth-quarter revenue to reach approximately $67.5 billion, significantly higher than the company’s previous guidance range of $65 billion. Regarding gross margins, Arcuri stated that no short-term factors are expected to impact the company’s 75% gross margin guidance, despite investor concerns fueled by perceived threats from Google (GOOGL.US) and Broadcom (AVGO.US).
Looking ahead, UBS expects NVIDIA to provide quarterly revenue guidance of up to $76 billion, far exceeding the market consensus range of $74 billion to $75 billion.
Overall, the bank believes that NVIDIA’s earnings report, scheduled for release after the market close on February 25, 2026, will serve as a significant near-term catalyst, while the upcoming GTC conference in March is expected to further solidify its long-term leadership in the AI sector, propelling the company’s market capitalization to new heights.
Editor/Rice