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On Thursday, Needham reiterated its Buy rating on NVIDIA stock (NASDAQ:NVDA), with a price target of $160.00. The semiconductor giant, currently valued at $3.29 trillion, maintains an "EXCELLENT" financial health rating according to InvestingPro analysis, with a perfect Piotroski Score of 9. The firm’s analyst highlighted NVIDIA’s first-quarter results for fiscal year 2026, noting a strong performance despite a weaker-than-expected forecast for the second quarter, attributed to the impact of H20 export controls.
The analyst pointed out that NVIDIA’s lost opportunity with its H20 orders is more significant than previously estimated, with $8 billion worth of orders for the second quarter that will not be fulfilled. Despite this, revenue from China’s data centers is expected to see a negligible decline. The company’s impressive 114.2% year-over-year revenue growth and robust 75% gross margin demonstrate its strong market position. The transition from Hopper to Blackwell is nearly complete, with Blackwell now accounting for approximately 70% of data center compute revenue. Major hyperscalers are rapidly adopting NVIDIA’s technology, deploying 1,000 NVL72 racks per week, a figure that is projected to rise throughout the quarter.
NVIDIA’s gross margin, excluding the H20 write-down, was better than anticipated, bolstered by improving profitability from Blackwell products. Additionally, networking revenue saw an increase to $5.0 billion, driven by demand for both Scale-Up and Scale-Out networking solutions.
The price target set by Needham is based on a price-to-earnings (P/E) multiple of approximately 27.5 times the firm’s new fiscal year 2027/calendar year 2026 non-GAAP earnings per share (EPS) estimate of $5.80. Currently trading at a P/E ratio of 46.09, NVIDIA’s valuation reflects confidence in its continued growth and leadership in its market segments. For deeper insights into NVIDIA’s valuation and 18 additional exclusive ProTips, visit InvestingPro, where you’ll find comprehensive analysis in our Pro Research Report.
In other recent news, NVIDIA has seen several updates from analysts regarding its financial outlook and stock ratings. Melius Research raised NVIDIA’s stock price target to $205 from $195, maintaining a Buy rating, citing strong demand for its new products and potential recovery in gross margins. Similarly, BofA Securities increased their price target to $180, highlighting NVIDIA’s confidence in gross margin recovery and robust sales projections for its Blackwell racks. Morgan Stanley (NYSE:MS) also adjusted its price target to $170, reflecting an optimistic revenue outlook and improved gross margins, while maintaining an Overweight rating.
DA Davidson raised its price target to $135, although it maintained a Neutral rating, noting the challenges NVIDIA faces due to uncertainties in the Chinese market. Wells Fargo (NYSE:WFC) maintained an Overweight rating with a $185 price target, emphasizing NVIDIA’s projected revenue growth and improved earnings estimates for upcoming fiscal years. Analysts have expressed optimism about NVIDIA’s ability to navigate geopolitical challenges and capitalize on demand for its new technologies.
These recent developments underscore the varied perspectives on NVIDIA’s potential, with analysts generally positive about its future earnings and revenue growth. The company’s resilience in the face of challenges, particularly in the Chinese market, has been a focal point for investors. As NVIDIA continues to execute its strategies, analysts are closely monitoring its performance across different markets and product lines.
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