Chipmaker Nvidia (NVDA) is still thriving, even with trade tensions between the U.S. and China. As a result, four-star Wedbush analyst Dan Ives believes that the company’s recent challenges could actually turn into a future advantage. Indeed, he said that the U.S.-China trade talks might end with Nvidia re-entering the Chinese market through a modified version of its H20 chip. If that happens, the $8 billion in missed revenue from export restrictions could be added back into Nvidia’s growth story.
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It is worth noting that Nvidia just reported another strong quarter that beat Wall Street expectations. But the company warned that it will lose out on $8 billion in second-quarter sales from its H20 AI chips because of tighter export controls. These restrictions are part of a broader U.S. policy to prevent China from getting advanced American technology. While many tech companies have struggled with supply chain issues, Nvidia is now facing trouble on the demand side by being kept out of a major market.
This has led CEO Jensen Huang to highlight Nvidia’s plans to produce more AI chips in the U.S. However, he also criticized the export rules by saying that they hurt Nvidia more than they slow down China. Unsurprisingly, Huang believes that these restrictions could backfire by damaging U.S. competitiveness and national security. Still, as Ives pointed out, if the U.S. and China reach a new agreement, Nvidia’s issues could quickly fade.
What Is a Good Price for NVDA?
Turning to Wall Street, analysts have a Strong Buy consensus rating on NVDA stock based on 35 Buys, four Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average NVDA price target of $172.43 per share implies 27.2% upside potential.
