US LNG exports surge but will buyers in China turn up?
On Wednesday, Citi analysts adjusted their outlook on NVIDIA Corporation (NASDAQ:NVDA), reducing the price target to $163 from the previous $175, while continuing to endorse the stock with a Buy rating. The revision comes ahead of the company’s earnings report for the January quarter, which is set to be released after the market closes on February 26. According to InvestingPro data, analyst targets for NVIDIA currently range from $130 to $220, with the stock maintaining a strong Buy consensus recommendation of 1.32.
Citi’s analysis indicates expectations for NVIDIA to report approximately $38 billion in sales for the January quarter and $42.5 billion for the April quarter. These projections are based on supply chain signals suggesting that the Blackwell product line will begin to scale up more significantly in the middle of the year, accompanied by a product mix shift between the GB200 and GB300 models. The company has demonstrated impressive growth, with revenue surging 152.44% in the last twelve months to $113.27 billion, while maintaining robust gross margins of 75.86%.
The analysts at Citi believe that NVIDIA’s stock is nearing a valuation support level, trading at a mid-20s price-to-earnings ratio and at a 25% discount compared to the average of its ASIC peers. This assessment follows a recent sell-off influenced by concerns over mid-term AI diffusion restrictions and ongoing discussions about AI infrastructure spending. Despite these challenges, Citi maintains a bullish stance on the company, referencing insights from a recent AI industry expert call note. InvestingPro analysis reveals NVIDIA’s perfect Piotroski Score of 9, indicating exceptional financial strength. For deeper insights into NVIDIA’s valuation and 20+ additional ProTips, access the comprehensive Pro Research Report available on InvestingPro.
NVIDIA’s stock has experienced limited movement since June of the previous year, influenced by declining gross margins due to product mix. Citi anticipates that gross margins will hit their lowest point in the April quarter. In response to potential risks associated with China’s data center restrictions, Citi has revised its CY25/26 earnings per share estimates downward by approximately 7%, leading to the adjusted price target of $163, which is based on a consistent 35x P/E ratio of the revised CY25 EPS. With a market capitalization of $2.91 trillion and an overall "GREAT" financial health score on InvestingPro, NVIDIA remains a prominent player in the semiconductor industry.
In other recent news, Jefferies analysts have suggested a potential ban on DS for consumer use in the United States due to national security and cybersecurity concerns. This development could see US AI developers self-hosting DS models or replicating its technology to create affordable AI solutions. Meanwhile, CoreWeave has launched NVIDIA GB200 NVL72-based instances to meet the demand for massive compute and optimized software for scaling AI reasoning models and agents.
According to ARK’s Big Ideas 2025 report, AI agents are poised to play a pivotal role in the future of digital applications, potentially driving rapid demand for new technologies. The report also predicts AI-mediated ads could capture over half of the $1.1 trillion digital ad market by 2030.
In other developments, Intel Corporation (NASDAQ:INTC) is potentially facing a formal antitrust investigation by Chinese regulators, adding to the complexity of its global business environment. Lastly, DA Davidson has reiterated its Neutral rating on NVIDIA Corporation shares, maintaining a price target of $135.00, highlighting the impact of recent advancements in AI.
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