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On Thursday, DA Davidson updated its outlook on NVIDIA Corporation (NASDAQ:NVDA), increasing the price target to $135 from the previous $120, while retaining a neutral stance on the stock. The adjustment came in response to NVIDIA’s recent earnings report, which presented a mixed financial picture. According to InvestingPro data, NVIDIA maintains excellent financial health with a perfect Piotroski Score of 9, while commanding a substantial $3.29 trillion market capitalization. The company reported top-line numbers that exceeded analysts’ expectations, yet faced challenges due to the absence of H20 product sales in China during the first and second quarters.
The firm’s analysis suggested that the market might not be fully recognizing the significance of the Chinese market to NVIDIA’s overall revenue. According to DA Davidson, the uncertainty surrounding NVIDIA’s business in China is a major factor influencing the company’s stock performance. This situation is expected to persist until there is clear guidance from the U.S. government. Despite these challenges, InvestingPro data reveals impressive revenue growth of 114.2% over the last twelve months, with analysts maintaining a strong consensus recommendation of 1.48 (where 1 is Strong Buy).
In their statement, DA Davidson highlighted that the lack of H20 sales in China had a noticeable impact on NVIDIA’s recent financial results. Despite this, the firm acknowledged the company’s stronger-than-anticipated revenue figures. The analyst from DA Davidson expressed the view that the ongoing ambiguity regarding NVIDIA’s dealings in China is the most significant issue for the company’s stock at the moment.
The tech company’s financial health and stock valuation are currently in a state of flux, with investors and analysts alike looking for indications from the Trump administration. While trading at a P/E ratio of 46.09, NVIDIA shows strong fundamentals with a current ratio of 4.44, indicating robust liquidity. The future trajectory of NVIDIA’s stock is likely to be influenced by the government’s stance on the matter. For deeper insights into NVIDIA’s valuation and comprehensive analysis, investors can access detailed Pro Research Reports available on InvestingPro, which covers over 1,400 top US stocks.
Investors are now watching closely for any developments regarding the U.S. government’s policy that could affect NVIDIA’s ability to conduct business in China, a key market for the company. The resolution of this issue is expected to be a decisive factor for NVIDIA’s stock moving forward. Based on InvestingPro’s Fair Value analysis, the stock appears slightly overvalued at current levels, with analyst price targets ranging from $100 to $220, reflecting the market’s mixed sentiment amid ongoing uncertainties.
In other recent news, NVIDIA Corporation has reported earnings and revenue results that have exceeded expectations, despite facing challenges such as export restrictions on its H20 product. The company’s first-quarter earnings surpassed projections, with an adjusted gross margin reaching 71.3%. For the upcoming quarter, NVIDIA has provided a revenue forecast of $4.5 billion, which analysts received positively. Truist Securities noted that without the export restrictions, the forecast could have been significantly higher, potentially reaching $8 billion more.
Cantor Fitzgerald has reiterated its Overweight rating on NVIDIA, maintaining a price target of $200, and highlighted a more optimistic revenue forecast for the July quarter, estimating between $48-50 billion. Evercore ISI also reaffirmed its positive stance with an Outperform rating and a $190 price target, noting a 73% year-over-year growth in NVIDIA’s Data Center business. Stifel and KeyBanc Capital Markets maintained their Buy and Overweight ratings, respectively, with price targets of $180 and $190, emphasizing NVIDIA’s strong performance in the Data Center sector.
Additionally, NVIDIA’s new Blackwell GPUs have seen rapid adoption, contributing significantly to revenue growth. The company has begun sampling its GB300 systems and plans to transition to production shipments later in the quarter. Analysts from various firms expressed confidence in NVIDIA’s market position and future earnings potential, despite current regulatory challenges.
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