Nvidia stock holds steady as UBS reiterates Buy rating amid China uncertainty

Investing.com - UBS maintained its Buy rating and $205.00 price target on Nvidia (NASDAQ:NVDA) Thursday, despite mixed quarterly results and guidance that fell slightly short of some investors’ expectations. The semiconductor giant, currently valued at $4.41 trillion, has demonstrated remarkable revenue growth of 86% over the last twelve months, according to InvestingPro data.

The semiconductor giant’s stock has risen more than 30% since its previous earnings report, creating a high bar for the company to clear in its latest financial disclosure. Trading near its 52-week high of $184.48, NVDA currently maintains an EXCELLENT financial health score on InvestingPro, though analysis suggests the stock is trading above its Fair Value.

UBS analyst Timothy Arcuri noted potential upside of $2-5 billion per quarter pending clarification on the mechanics of a 15% fee for licenses to ship H20 chips back to China, which could offset some investor concerns about guidance.

The investment bank identified ongoing transition issues with Nvidia’s GB200/300 rack systems, as Blackwell revenue growth underperformed expectations while balance sheet inventory, particularly finished goods, increased significantly.

Despite these challenges, UBS made only minimal changes to its estimates for Nvidia, maintaining both its price target and positive outlook on the stock.

In other recent news, Nvidia reported impressive financial results, with revenue reaching $46.7 billion, surpassing its original guidance by $1.7 billion and consensus estimates by $700 million. The company faced export restrictions on its H20 GPUs in the Chinese market, which impacted revenue by an estimated $4 billion. In the second quarter, Nvidia’s revenue was $46.74 billion, with earnings per share of $1.05, exceeding analyst expectations of $46.23 billion and $1.01, respectively. The gaming segment notably contributed $4.3 billion in revenue, outperforming market forecasts.

Benchmark raised its price target for Nvidia to $220, maintaining a Buy rating, while Bernstein increased its target to $225 with an Outperform rating. Cantor Fitzgerald reiterated its Overweight rating and maintained a $240 price target, noting Nvidia’s revenue guidance of $54 billion for the October quarter, which exceeded the consensus estimate of $52.6 billion. Stifel reiterated a Buy rating with a $212 price target, highlighting the gaming segment’s strong performance, though Data Center revenue was lower than anticipated.

Rosenblatt also raised its price target to $215, maintaining a Buy rating, and noted the ramp-up of Nvidia’s Grace Blackwell-based racks, with shipments expected to accelerate. These developments reflect a positive sentiment among analysts regarding Nvidia’s recent performance and future prospects.

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