Stock market today: S&P 500 drops for fifth day as focus shifts to Powell’s speech
On Tuesday, BofA Securities expressed continued confidence in NVIDIA Corporation (NASDAQ:NVDA), maintaining a Buy rating and a $160.00 price target for the stock. The $3.2 trillion market cap company, which boasts a perfect Piotroski Score of 9 according to InvestingPro, has demonstrated remarkable financial strength with 114.2% revenue growth over the last twelve months. The endorsement follows an updated first-quarter preview by BofA analyst Vivek Arya, who took into account recent supply chain discussions, investor conversations, and NVIDIA’s commentary at the recent Computex tradeshow.
Arya highlighted a discrepancy between NVIDIA’s reported $15 billion in lost sales in China due to the U.S. government’s ban on H20 sales to the country, and the more modest $10-$12 billion revised sales expectations for fiscal year 2026/calendar year 2025 by analysts and investors. Additionally, consensus revisions have lowered expectations even further to $3.8 billion. Arya noted that this gap could widen, potentially creating a $4-$5 billion headwind in the second fiscal quarter, depending on the original timing of NVIDIA’s shipments to China.
The analyst is also looking for signs of confidence from NVIDIA’s management regarding a recovery in gross margins (GM) back to the target mid-70s percentage range in the second half of the year, compared to a consensus of 73%/74% in the third and fourth fiscal quarters. Notably, InvestingPro data shows NVIDIA’s current gross profit margin stands at 75%, suggesting the company is already operating within its target range. This would be indicative of strong demand and successful execution of rack-level product yields by the company’s Blackwell division.
Despite the near-term challenges, BofA Securities remains bullish on NVIDIA, citing the company’s strategic position in the global AI deployment cycle. With analyst consensus targets ranging from $100 to $220 per share, and an overall "Strong Buy" recommendation according to InvestingPro, which offers 18 additional key insights about NVIDIA’s valuation and growth prospects in its comprehensive Pro Research Report, the market appears to share this optimism. Arya also suggested that there could be a potential recovery in China sales later in the year with the introduction of new redesigned and compliant products.
In other recent news, NVIDIA is set to release its first-quarter fiscal 2025 earnings, with analysts from Stifel and Susquehanna maintaining a Buy rating and a Positive rating, respectively, both with a $180 price target. Stifel anticipates NVIDIA’s results and outlook will align with expectations, despite potential revenue impacts from H20 restrictions. Susquehanna’s Christopher Rolland noted that these restrictions affected $1 billion in sales, leading to a revised forecast of $186 billion in total company revenue for FY26. Meanwhile, DA Davidson reaffirmed a Buy rating for Amazon (NASDAQ:AMZN), with a $230 price target, highlighting the deployment of Anthropic’s Claude 4 model on Amazon’s Trainium chips as a positive development for Amazon Web Services.
Additionally, cryptocurrency exchange Kraken announced plans to offer tokenized equities, allowing non-US customers to trade stocks like NVIDIA and Amazon as tokens. This move aims to simplify access to US stocks for international investors by enabling 24/7 trading. Despite some challenges, analysts remain optimistic about NVIDIA’s future, with expectations of increased gross margins and strong AI demand. The gaming sector is also projected to see growth, driven by easing supply constraints and rising GPU prices. Overall, these developments reflect significant opportunities and strategic moves for both NVIDIA and Amazon in the evolving tech landscape.
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