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On Thursday, Susquehanna analyst Christopher Rolland maintained a Positive rating on NVIDIA stock (NASDAQ:NVDA), with a steady price target of $180.00. With a perfect Piotroski Score of 9 according to InvestingPro, NVIDIA demonstrates exceptional financial strength. Rolland’s commentary ahead of NVIDIA’s earnings report on Wednesday, May 28, anticipates generally in-line revenue for January. However, he noted that China’s H20 restrictions impacted the last three weeks of sales in the quarter, affecting approximately $1 billion in revenue. This comes as NVIDIA has shown impressive revenue growth of 114.2% over the last twelve months.
Rolland has adjusted his forecast for NVIDIA’s FY26 Data Center revenue to approximately $168 billion and total company revenue to around $186 billion. This revision is a decrease of $14 billion from the previous estimate of $200 billion. The adjustment takes into account the lost Chinese revenue. Additionally, NVIDIA has reported a $5.5 billion charge related to inventory, purchase commitments, and related reserves, which is expected to lower gross margins to an estimated 58.5% for the April quarter. For deeper insights into NVIDIA’s valuation and financial metrics, including exclusive Fair Value calculations that suggest the stock is slightly overvalued, check out the comprehensive Pro Research Report available on InvestingPro.
Despite these challenges, Rolland expects NVIDIA’s gross margins to reach the mid-70s in the second half of FY25, as the new Blackwell platform is expected to fully ramp up. This aligns with NVIDIA’s current impressive gross profit margin of 75% and its strong financial health score of 4.73 out of 5 on InvestingPro. He also noted strong AI demand, with the top five hyperscalers projected to increase capital expenditure by 40% year-over-year in 2025. For the April quarter, he expects increased Blackwell revenue, supported by positive feedback from OEMs like HPE and Super Micro.
In the gaming sector, NVIDIA has forecasted strong growth for the first quarter as supply constraints ease. Rolland’s data suggests NVIDIA has gained modest aftermarket GPU share and GPU retail average selling prices have risen by 19.8% quarter-over-quarter in the first quarter of FY25. While Nintendo Switch sales have been underwhelming, an uplift is expected with the launch of the Switch 2 on June 5.
The Pro Viz segment is anticipated to continue its growth trajectory, driven by generative AI and Omniverse. However, the automotive sector presents a mixed outlook, with softer than expected global EV and ICE demand, especially outside of China, potentially impacted by tariffs.
Despite the near-term headwinds and earnings per share reduction of $0.50 from the previous FY26 estimate, Rolland’s reiteration of the Positive rating and $180 price target reflects confidence in NVIDIA’s significant future opportunities. Trading at a P/E ratio of 44.28 and commanding a market capitalization of $3.24 trillion, NVIDIA remains a dominant force in the semiconductor industry. Investors seeking detailed analysis of NVIDIA’s growth prospects and over 20 additional ProTips can access the full research report on InvestingPro.
In other recent news, Navitas Semiconductor has announced a collaboration with NVIDIA to develop an 800V high-voltage direct current (HVDC) architecture for AI data centers. This partnership aims to improve power efficiency and reduce infrastructure complexity, leveraging Navitas’ GaNFast and GeneSiC technologies. NVIDIA’s new architecture is expected to enhance power delivery by converting 13.8 kV AC grid power directly to 800 V HVDC, potentially reducing copper usage by up to 45% compared to traditional systems. Navitas’ innovations, including high-speed power supplies and patented digital control techniques, play a crucial role in this development. Meanwhile, Cantor Fitzgerald and Wells Fargo (NYSE:WFC) have both maintained an Overweight rating on NVIDIA stock, with price targets of $200 and $185, respectively. Analysts from these firms have highlighted NVIDIA’s resilience and strategic advancements, such as NVLink Fusion and the upcoming NVLink version 6, which are expected to bolster the company’s position in AI infrastructure. Citi also reiterated a Buy rating on NVIDIA, emphasizing the company’s progress in AI and data center technology, including the anticipated shipment of the GB300 in the third quarter. These developments underscore NVIDIA’s ongoing efforts to expand its market presence and technological capabilities.
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