Gold bars to be exempt from tariffs, White House clarifies
On Wednesday, Evercore ISI maintained its positive stance on NVIDIA (NASDAQ:NVDA) shares, keeping an Outperform rating and a $190.00 price target. The semiconductor giant, currently valued at $2.74 trillion with a perfect Piotroski Score of 9, faces new regulatory challenges. The firm’s analyst cited recent regulatory changes, noting that NVIDIA must now secure a license to sell its H20 or similar high-memory bandwidth chips to entities headquartered in China, including Hong Kong and Macau, as well as embargoed/D5 countries. According to InvestingPro data, NVIDIA maintains excellent financial health with a "GREAT" overall score, suggesting strong resilience to regulatory headwinds. This requirement, effective April 9, 2025, is anticipated to result in substantial charges for NVIDIA.
NVIDIA estimates that it will incur $5.5 billion in charges related to H20 products for inventory, purchase commitments, and associated reserves in the April 2025 quarter. Despite these challenges, the company has demonstrated remarkable revenue growth of 114.2% over the last twelve months, with strong profitability metrics including an 82.2% return on assets. Evercore ISI has adjusted its revenue forecast for NVIDIA in calendar year 2025, reducing it by $3.5 billion, which includes a $0.6 billion reduction for the April quarter. For deeper insights into NVIDIA’s financial metrics and growth trajectory, InvestingPro offers comprehensive analysis through its Pro Research Report, one of 1,400+ detailed company analyses available to subscribers. The firm also expects the announced charges to affect the cost of goods sold in that quarter, projecting a decrease in non-GAAP gross margin from 71% to 58%.
Consequently, Evercore ISI has revised its earnings per share (EPS) estimate for NVIDIA in the April 2025 quarter to $0.71, a 22% or $0.21 decrease from the prior estimate. The full-year and next twelve months (NTM) EPS forecasts have also been lowered by 6%, from $4.62 to $4.33.
Despite these adjustments, historical analysis by Evercore ISI suggests a potential rebound. The firm referenced three case studies of past disruptions, including chip issues in 2008 and China restrictions in 2022 and 2023. With a beta of 1.96 indicating higher volatility than the market, NVIDIA currently trades at a P/E ratio of 37.89, reflecting market expectations for continued growth. InvestingPro analysis reveals 16 additional key insights about NVIDIA’s valuation and growth prospects, available exclusively to subscribers. In 2022, a 28% cut in NTM earnings was followed by a recovery back to the trendline within a year, while the 2023 China restrictions did not appear to negatively impact earnings. Evercore ISI has not yet discussed the latest developments with NVIDIA management but anticipates that the situation could unfold similarly to the 2022 event, where initial earnings estimate reductions were followed by a return to the earnings trendline within a year.
In other recent news, NVIDIA Corporation has disclosed that it anticipates up to $5.5 billion in charges in its first-quarter financial results for fiscal year 2026. This is due to new U.S. government export restrictions affecting shipments to China, including Hong Kong and Macau. The restrictions require a license for exporting certain integrated circuits, which has significant financial implications for the company. Additionally, NVIDIA has launched its GeForce RTX 5060 GPUs, featuring advanced AI technologies and priced starting at $299. These GPUs are expected to enhance gaming and creative workflows with features like DLSS 4 and ray tracing.
Moreover, President Trump praised NVIDIA’s investment in the U.S., highlighting it as a significant announcement. He mentioned NVIDIA’s plans to invest hundreds of billions of dollars in the U.S., which aligns with his administration’s focus on boosting domestic manufacturing. Meanwhile, the Magnificent Seven stocks, including NVIDIA, have seen a rise in premarket trading amid potential pauses in auto tariffs. Despite ongoing trade probes by the Commerce Department, these stocks have shown resilience. These developments reflect NVIDIA’s ongoing strategic initiatives and its navigation through regulatory and market challenges.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.