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On Thursday, Deutsche Bank (ETR:DBKGn) analysts adjusted their outlook on NVIDIA (NASDAQ:NVDA) shares, raising the price target from $125.00 to $145.00, while maintaining a Hold rating on the stock. The new price target reflects an increase of $20.00. The adjustment comes after NVIDIA’s recent financial disclosures, which indicated resilience in the face of trade restrictions. With a current market capitalization of $3.29 trillion and a P/E ratio of 46.09, NVIDIA trades at premium multiples, reflecting its dominant position in the semiconductor industry. According to InvestingPro analysis, the stock appears slightly overvalued based on its proprietary Fair Value model.
NVIDIA reported robust financial results, with first and second fiscal quarter revenues of $44 billion and $45 billion, respectively. These figures align with Deutsche Bank’s estimates of $44 billion for both quarters. The company maintains impressive profitability with a 75% gross margin and has achieved remarkable revenue growth of 114.2% over the last twelve months. However, the company’s revenue and gross margins were affected by challenges in China, resulting in a $2.5 billion revenue headwind for the first quarter and an $8 billion headwind for the second quarter. Gross margins were also impacted, facing a 1030 basis points headwind. InvestingPro data reveals NVIDIA has achieved a perfect Piotroski Score of 9, indicating exceptional financial strength. Subscribers can access 18 additional exclusive ProTips and comprehensive financial analysis.
Despite these challenges, NVIDIA demonstrated strong performance in several areas. Notably, the ramp-up of the company’s Blackwell GPUs generated $24 billion in revenue compared to $11 billion in the first quarter. Additionally, NVIDIA’s Data Center Networking and Gaming segments experienced significant growth, with Data Center Networking revenue up 64% quarter-over-quarter to $5 billion, and Gaming revenue increasing by 48% quarter-over-quarter to $3.8 billion. The company’s overall financial health score is rated as EXCELLENT by InvestingPro, which provides detailed analysis through its comprehensive Pro Research Report, available for over 1,400 US stocks.
NVIDIA has reiterated its stance on the counterproductive nature of AI shipment restrictions in China and remains hopeful that it will eventually be able to tap into the $50 billion total addressable market. Although the company has not announced any products compliant with the current restrictions, nor included them in the second quarter guidance, there is potential for future upside.
In other recent news, NVIDIA Corporation has experienced a series of notable developments that are capturing investor attention. NVIDIA reported a higher-than-expected revenue of $44.1 billion for the April quarter, surpassing the consensus estimate of $43.3 billion, as noted by Mizuho (NYSE:MFG) Securities. The company also provided guidance for the July quarter, projecting revenues around $45 billion. Meanwhile, TD Cowen raised its price target for NVIDIA to $175, citing strong financial performance and positive feedback on NVLink deployments among cloud service providers.
Jefferies maintained its Buy rating with a $185 price target, highlighting the resolution of inventory issues and the promising sampling of the GB300 with major cloud service providers. Summit Insights Group upgraded NVIDIA stock from Hold to Buy, expressing confidence in the company’s AI GPU and datacenter networking businesses. Bernstein reiterated an Outperform rating with a $185 target, acknowledging challenges from regulatory headwinds in China but remaining optimistic about NVIDIA’s future prospects.
NVIDIA’s data center revenues saw a significant 73% year-over-year increase, driven by strong demand for Blackwell products. The company is also preparing for the shipment of the GB300 Ultra in the July quarter, which is expected to further boost its product lineup. Despite challenges, NVIDIA is positioned to navigate industry dynamics effectively, with analysts closely monitoring its performance in upcoming quarters.
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