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Since my last coverage, NVIDIA Corporation (NVDA) is up by 34% despite the infamous 8-K filed on April 15 following the announcement that the company is required to apply for a license to export
Nvidia: The Drama Is Over - Back To $150 By Year-End
Summary
- Despite the H20 GPU export license drama, Nvidia is up by 5% since April 15. I believe the market is paying more attention to the growth story in the US.
- I believe the decline in gross margins since Q2 last year may be driven by H20 sales in China. The less revenue exposure to this country, the higher the margins.
- That said, H20 GPU sales in China are robust, with major orders from ByteDance, Alibaba, and Tencent in Q1, mitigating the $5.5 billion headwind.
- The company is still undervalued when compared to its historical performance and to its closest peers.
- I reiterate my strong buy rating. Despite sectoral tariffs on semis, I believe Nvidia could reach the $150s by year-end.
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