Nvidia: Limited China Impact, Strong Buy Maintained
Summary
- Nvidia Corporation faces a significant revenue hit from new U.S. export restrictions on H20 chips to China, but dependency on China is steadily declining.
- We expect Nvidia to mitigate much of the lost China revenue by launching a compliant, lower-priced GPU and leveraging its strong CUDA software ecosystem.
- Strong demand from U.S. cloud providers and new international projects (Saudi Arabia, UAE) will drive robust growth, with Blackwell GPUs sold out for 12 months.
- Despite China revenue loss, our DCF valuation implies a huge upside remaining. Hence, we maintain our Strong Buy rating on NVDA stock due to Nvidia’s resilient growth and global demand.
Analyst’s Disclosure:I/we have a beneficial long position in the shares of NVDA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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