Now is the time for investors to get more bullish on Nvidia , according to UBS. Analyst Timothy Arcuri maintained his buy rating on the stock and raised his price target to $540 from $475. The new forecast implies a 23.4% upside over the next 12 months. The analyst also raised his estimates ahead of Nvidia’s second-quarter earnings, which are due Aug. 23 after market close. “Investor expectations for F2025 (C2024) EPS have risen substantially, but we recommend investors stay the course here and remain bullish amid the recent pullback in the stock over the past month,” Arcuri wrote in a Monday note. “Demand will dictate NVDA’s long-term AI revenue opportunity, but supply should be the primary determinant for its data center revenue at least through C2024.” UBS estimates that 5,000 to 10,000 graphics processing units, or GPUs, are required to train and inference a large model, with much of this training capacity reused to continually train new models. While training demand remains strong, Arcuri said that more of the demand over time will come from inference given the increasing number of AI start-ups pursuing various inference applications. “For the time being until model optimization becomes more prevalent, there is a very strong positive relationship between additional computing resources and a better model output or algorithm,” the analyst said. Nvidia’s GPUs have proven to be the best for training AI models, which has made investors confident that Nvidia will come out on top in the AI revolution with its ability to power massive large language models. OpenAI’s viral chatbot, ChatGPT — as well as other AI models from few well-financed startups — all run on Nvidia’s GPUs. “NVDA is quite literally serving as ‘kingmaker’ as a huge wave of capital and new financing vehicles are chasing new AI software and specialized cloud infrastructure models (CoreWeave, Lamda Labs, etc…) while enterprises are still very early in a struggle to access enough capacity to build out AI at scale – this likely lasts well into next year,” Arcuri said. Shares of Nvidia have lost nearly 6.4% this month but have added more than 199% gains this year, which have beaten every other member of the S & P 500. The stock is up in premarket trading Tuesday. NVDA YTD mountain NVDA in 2023 Other firms have raised their outlook on Nvidia ahead of its earnings. Wells Fargo on Tuesday raised its price target on the chipmaker to $500, citing its status as the primary beneficiary of an AI-driven architectural data center transformation. Morgan Stanley on Monday reiterated Nvidia as a “top pick” and maintained its $500 price target, which sent the company’s shares 7% higher during the day’s trading session. — CNBC’s Michael Bloom contributed reporting.