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On Thursday, HSBC analyst Frank Lee confirmed a Hold rating on NVIDIA (NASDAQ:NVDA) with a consistent price target of $120.00, as the company approaches its first-quarter results expected to be announced on May 28, 2025. With NVIDIA currently trading at $134.92, InvestingPro data shows the stock trading above its Fair Value, despite maintaining a perfect Piotroski Score of 9, indicating strong financial health. Lee anticipates NVIDIA’s sales to align with management’s and consensus estimates, projecting $43.5 billion for the first quarter, which is consistent with the guidance of $43 billion and slightly above the consensus of $43.1 billion.
For the second quarter of fiscal year 2026, Lee forecasts NVIDIA’s sales to reach $45.0 billion. This estimate falls short of the consensus figure of $46.7 billion but surpasses recent lower expectations from bearish sell-side analysts who predicted $44 billion. The company’s impressive 114.2% revenue growth over the last twelve months and robust gross profit margin of 75% demonstrate its strong market position, though InvestingPro data reveals that 10 analysts have recently revised their earnings expectations downward. NVIDIA’s sales for both the first and second quarters of fiscal year 2026 are expected to meet market predictions despite not significantly exceeding them.
The analyst’s cautious stance stems from several factors, including the anticipated loss of revenues from the H20 AI GPU starting in the second quarter of fiscal year 2026 and a projected decline in gross margins for the first quarter due to a substantial $5.5 billion write-off resulting from licensing restrictions in China.
Lee’s analysis suggests that while NVIDIA is likely to maintain its performance in line with market expectations, the company may not deliver the robust growth seen in previous quarters. The loss of H20 AI GPU revenues and the impact of the China licensing issue are expected to temper NVIDIA’s financial results.
Investors and market watchers are now looking ahead to the May 28 announcement to see how NVIDIA’s actual performance for the first quarter aligns with these projections and to gain insights into the company’s outlook for the coming quarter. For deeper insights into NVIDIA’s valuation and future prospects, InvestingPro subscribers can access comprehensive analysis, including 20+ additional ProTips and a detailed Pro Research Report that transforms complex Wall Street data into actionable intelligence.
In other recent news, Nvidia has entered into a significant partnership with Saudi Arabian AI firm Humain, aiming to supply chips for a major data center project. This collaboration is part of a broader initiative with the Kingdom (TADAWUL:4280) of Saudi Arabia to enhance AI and digital infrastructure, aligning with the country’s Vision 2030 goals. Additionally, DA Davidson has maintained a Neutral rating on Nvidia, with a steady price target of $120, highlighting both opportunities and challenges, particularly concerning regulatory issues in China. Meanwhile, Wolfe Research has expressed concerns over AI spending in 2026 despite a projected 35% increase in 2025, suggesting potential risks in sustaining such growth. Among the ’Magnificent Seven’ tech companies, Nvidia and others have shown varied performances, with Nvidia experiencing a notable premarket gain after the Saudi deal. Tesla (NASDAQ:TSLA), another key player in the tech sector, saw a decline in stock value during recent premarket trading, alongside other tech giants like Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN). President Donald Trump has also raised concerns over Apple’s production shift to India, impacting discussions with CEO Tim Cook. These developments reflect ongoing shifts in the tech industry, driven by geopolitical factors and strategic partnerships.
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