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On Wednesday, TD Cowen reiterated its Buy rating and $140.00 price target for NVIDIA (NASDAQ:NVDA) shares, a company that currently boasts a perfect Piotroski Score of 9 according to InvestingPro data. The firm’s analyst Joshua Buchalter highlighted NVIDIA’s recent disclosure that its China-focused H20 product is now subject to license requirements. This development could lead to up to $5.5 billion in inventory and other charges in the upcoming April quarterly report. Despite this challenge, the analyst emphasized NVIDIA’s strong position in the AI market, which is reflected in the company’s impressive 114.2% revenue growth over the last twelve months.
NVIDIA’s announcement of licensing requirements for the H20 product may introduce a near-term overhang for the company’s stock. However, Buchalter pointed out that the overall environment for sustainable AI demand, driven by products like Blackwell, continues to be the main factor shaping the company’s narrative and fundamentals. With a market capitalization of $2.55 trillion and a "GREAT" financial health score from InvestingPro, NVIDIA maintains a strong foundation for future growth.
Buchalter reaffirmed his belief in NVIDIA’s leadership in accelerated computing. He noted that despite the current headwinds faced by NVIDIA and its peers due to the sales restrictions into China, the company’s strategic product lineup, including the CPU/GPU/DPU combination found in the Grace/Blackwell systems and the future Vera/Rubin systems, is expected to support robust data center growth in the forthcoming years.
The analyst’s confidence in NVIDIA is rooted in the company’s innovative offerings and its anticipated ability to navigate longer-term potential issues related to the China market. Buchalter’s reiteration of the Buy rating and price target reflects his view that NVIDIA’s leadership in AI and accelerated computing will continue to drive its growth trajectory.
In conclusion, TD Cowen sees NVIDIA’s recent regulatory challenges in China as a temporary setback. The firm maintains that NVIDIA’s strong product pipeline and leadership in AI will enable the company to sustain growth in the data center sector, underscoring its positive outlook on NVIDIA’s stock. According to InvestingPro analysis, NVIDIA appears slightly undervalued at current levels, with analyst targets ranging from $115 to $220 per share. Discover 15+ additional exclusive ProTips and comprehensive valuation metrics with an InvestingPro subscription, including the detailed Pro Research Report available for NVIDIA and 1,400+ other top stocks.
In other recent news, NVIDIA has disclosed that it anticipates incurring charges of approximately $5.5 billion related to its H20 products due to new U.S. government export restrictions. This development follows an 8-K filing that revealed the need for a license to export these products to China and other countries under U.S. arms embargoes. In response, Piper Sandler adjusted NVIDIA’s stock price target to $150, citing revised financial projections. Meanwhile, UBS maintained a Buy rating with a $185 target, highlighting potential impacts on earnings per share.
Cantor Fitzgerald also reiterated its Overweight rating with a $200 target, emphasizing NVIDIA’s strategic approach to navigating regulatory challenges. Mizuho (NYSE:MFG) Securities maintained an Outperform rating and a $168 target, noting that NVIDIA’s long-term capital expenditure in artificial intelligence remains a key interest for investors. William Blair, despite the export curbs, upheld an Outperform rating, acknowledging NVIDIA’s technological leadership and demand for its Blackwell GPUs.
These developments underscore NVIDIA’s proactive measures amid evolving trade policies and geopolitical tensions. As the company navigates these challenges, its strategic decisions and market leadership in AI infrastructure continue to draw attention from analysts.
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