NVIDIA (NVDA 4.08%) The stock recorded significant gains in Monday trading. The share price of the market leader in artificial intelligence (AI) rose by 4.1% during the day, according to data from S&P Global Market Intelligence.

Nvidia shares have surged in trading today as investors and analysts reassessed the impact of a potential delay to the first generation of the company’s upcoming Blackwell processors. The company’s share price also likely received a boost from news that the graphics processing unit (GPU) frontrunner had signed a new AI training contract with the state of California.

Nvidia continues to record success in the public sector

Nvidia has stressed the importance of developing AI systems for countries. The company expects a dramatic increase in public spending on developing artificial intelligence systems as countries look to strengthen their national defense capabilities and overall sovereignty. The announcement of the new training partnership with California reflects a similar dynamic at the U.S. state level. It would not be surprising to see Nvidia announce more AI training contracts with other states in the near future.

Is Nvidia stock on track for further big 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. The artificial intelligence leader’s stock has been volatile in trading recently as investors weighed concerns over expectations that the first Blackwell processors will be delayed. With the company closing today’s intraday session valued at about $109 per share, UBS’s price target suggests near-term upside of about 38%.

The first products in the Blackwell series are expected to bring a significant leap forward in processing power and should be a key performance driver for Nvidia this year. In general, the market has also been a bit nervous recently when it comes to the valuations of megacap companies and leading AI companies. However, the bank believes that the technology stock is undervalued at the current price.

UBS believes that a potential delay in the release of the first Blackwell processors would result in them hitting the market by the end of January 2025. The bank’s equity analysts expect overall demand for Nvidia’s processors to remain very strong. While some analysts have forecast the AI ​​leader’s profits to hit a short-term peak in 2025, UBS believes profits are likely to continue to rise in 2026.