TD Cowen cuts NVIDIA stock price target to $140, maintains Buy

On Wednesday, TD Cowen adjusted its outlook on NVIDIA Corporation (NASDAQ:NVDA), reducing the price target from the previous $175.00 to $140.00, while reiterating a Buy rating for the stock. The adjustment comes as NVIDIA's stock has declined nearly 28% year-to-date, though InvestingPro data shows the company maintains a "GREAT" overall financial health score. The adjustment was announced by analyst Joshua Buchalter, who emphasized the significance of NVIDIA's Blackwell as a key element influencing the company's performance in the upcoming quarters.

Buchalter noted that NVIDIA's fundamentals for both the April and July quarters would be driven by Blackwell, with the initial production volumes of GB200-based NVL72 racks expected to provide a boost to revenue. He highlighted the potential challenges faced by NVIDIA's customers in deploying these complex rack-level systems and their considerations for the transition from Blackwell to Blackwell Ultra.

Despite the reduction in the price target, NVIDIA remains TD Cowen's top choice within the compute sector. Buchalter's remarks underscore the firm's strong conviction in NVIDIA's technological leadership and its long-term prospects. According to InvestingPro analysis, NVIDIA trades at a P/E ratio of 33.5x, with impressive revenue growth of 114% in the last twelve months. The company's current market position, while showing signs of being slightly undervalued based on InvestingPro's Fair Value model, reflects its continued prominence in technology. For deeper insights into NVIDIA's valuation and 20+ additional exclusive ProTips, consider exploring the comprehensive Pro Research Report available on InvestingPro.

The analyst concluded his comments with a broader perspective on the compute industry, suggesting that while NVIDIA stands out, there is perceived value in the sector for those investors who are willing to take on risk during a downturn. Supporting this view, NVIDIA maintains strong fundamentals with a perfect Piotroski Score of 9 and a healthy current ratio of 4.44, indicating robust financial stability. The statement implies a belief in the potential for gains among various companies in the sector for those prepared to 'catch a falling knife,' a metaphor for buying into a declining market with the expectation of a future rebound.

In other recent news, Nvidia has been a focal point in the semiconductor industry, with KeyBanc Capital Markets maintaining an Overweight rating on the company and setting a price target of $190. Despite challenges in the sector, including issues with the GB200 NVL rack yields and potential delays for the Blackwell Ultra, KeyBanc remains confident in Nvidia's near-term revenue projections. Meanwhile, Nvidia led a premarket rise among the Magnificent Seven stocks, recording a 2.9% increase, alongside gains from companies like Amazon (NASDAQ:AMZN) and Meta (NASDAQ:META). The company's stock performance continues to be closely watched as it navigates the complexities of the semiconductor market.

The broader semiconductor industry is experiencing volatility due to tariffs imposed by the Trump administration, affecting major chip-making regions such as Taiwan and China. These tariffs have contributed to a global downturn in semiconductor stocks, with companies like Taiwan Semiconductor Manufacturing Co. and Tokyo Electron seeing significant declines. Ming-Chi Kuo from TF International Securities has advised investors to exercise caution given the uncertain landscape surrounding these tariffs. As the situation develops, investors remain attentive to how companies like Nvidia will adapt to these external pressures.

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