UBS Expects Nvidia to Calm Growth Worries With Q1 Beat

UBS analysts expect Nvidia (NASDAQ: NVDA) to report fiscal first-quarter results slightly ahead of guidance, potentially easing investor concerns about short-term growth amid regulatory and supply chain challenges.

In a preview note, UBS forecasts April-quarter revenue of approximately $44 billion, slightly ahead of the company’s guidance of $43 billion.

However, adjusted earnings per share (EPS) are expected at $0.76, below the Street consensus of $0.89. Analysts attributed the shortfall primarily to gross margin impacts from charges linked to the U.S. H20 GPU export ban.

“This should be enough to satisfy investors because many (about half) expect revenue to be guided down quarter-on-quarter,” wrote UBS analysts led by Timothy Arcuri.

While adjusting near-term estimates due to the H20 export ban, UBS maintained a Buy rating on Nvidia, though it lowered its 12-month price target from $180 to $175. This reflects the reduced EPS forecast, with fiscal 2026 EPS now expected at $4.22, down from a previous estimate of $4.86. The downward revision largely reflects gross margin adjustments.

For the July quarter, UBS expects slight revenue growth to $44.6 billion, above the consensus estimate of $43.1 billion for the previous quarter, but below the Street’s $46.5 billion estimate. The analysts point to Blackwell GPU shipments as a key driver of sequential growth, though delays and limited inventory repurposing due to the H20 export ban may temper the upside.

Still, UBS remains optimistic about strong data center growth in the second half of 2025 as new products, including the GB300 chip, begin to ship.

“We do expect a confident overall tone on the call,” analysts said, though they cautioned that Nvidia may soften its second-half gross margin outlook, given its decision to delay higher-margin compute boards until next year.

For the April quarter, Blackwell revenue is forecast to more than double to around $25 billion, with B200 chips accounting for nearly 70% of the unit mix as customers gravitate toward the HGX platform.

Looking ahead to Q2, UBS sees Blackwell revenue rising by about $9 billion quarter-over-quarter to reach $34 billion, despite capacity constraints and delayed GB200 rack deliveries.

Overall, UBS analysts maintain a positive outlook for Nvidia and expect the company to regain momentum in the second half of 2025, driven by new chip shipments and a potentially favorable shift in export regulations.

As of the latest update, Nvidia (NASDAQ: NVDA) shares are down 0.89%, trading at $121.91.