Highlights from NVIDIA's CES Keynote and Q&A
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UBS maintains a Buy rating and a $235 target price on NVIDIA, expecting upcoming stock performance to be driven by EPS revisions for fiscal years 2026 and 2027. During the CES keynote and Q&A, management emphasized robust demand, noting that inference models are powering 2025 growth with token demand increasing approximately fivefold. Additionally, agentic AI and physical AI are beginning to generate incremental demand.
The Vera Rubin platform is now in full production, with volume shipments to customers expected in the second half of 2026. Its rack-level innovations deliver roughly 3.5 times the peak workload performance compared to previous generations. The architecture is highly modular, reducing assembly time from two hours to five minutes, which should facilitate faster ramp-up and mitigate the gross margin headwinds seen during the Blackwell rollout.
Regarding the Groq partnership, NVIDIA acknowledged Groq's differentiated low-latency technology but expects Rubin to account for approximately 90% of compute deployments. UBS maintains its earnings forecasts but sees upside risks from faster cycle times, Rubin scaling, and a potential recovery in China shipments, which could add $8-10 billion in quarterly revenue.