Melius Research analyst Ben Reitzes has reiterated their bullish stance on NVDA stock, giving a Buy rating today.
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Ben Reitzes has given his Buy rating due to a combination of factors that indicate strong future performance for Nvidia. One of the primary reasons is the company’s impressive sales growth, particularly outside of China, which is expected to exceed market expectations by $2-3 billion in the upcoming quarter. This growth is driven by increased demand from major cloud providers and the gaming sector for Nvidia’s new Blackwell-based products. Additionally, Nvidia’s gross margins are anticipated to return to the mid-70% range, enhancing long-term earnings potential.
Furthermore, Reitzes notes a positive shift in Nvidia’s market tone following the rescindment of the AI Diffusion rule, which has sparked significant sovereign AI demand. Despite challenges in the Chinese market, Nvidia’s guidance for non-China related demand shows a promising acceleration, with an expected 14% quarter-over-quarter growth. This growth, combined with the potential for future recovery in Chinese revenue and the ongoing demand from sovereign and hyperscaler sectors, supports a higher target price and reinforces the Buy rating.
In another report released today, Evercore ISI also reiterated a Buy rating on the stock with a $190.00 price target.