NVIDIA (NVDA), China Regulations Lifted, Target Price Jumps to $350... 'Buy' Rating Maintained

▲ NVIDIA

NVIDIA Corp. (NVDA), which had been suppressed by sluggish business in China, has geared up for a counterattack. Bank of America maintained its target price of $350 and a 'Buy' rating, stating that the market is underestimating NVIDIA's dominance, and presented a level 78% higher than the current stock price.

According to the US investment community StockTwits on July 8 (local time), NVIDIA's stock price rose 3.7% that day, continuing its upward trend for three consecutive trading days. The daily increase was the largest in about a month, and investment funds shifted to existing large-cap technology stocks amid volatility surrounding the US-Iran ceasefire situation and slowing growth in memory stocks.

Expectations for a recovery in China's business also pushed up NVIDIA's stock price. The Information reported that the Chinese government plans to allow some AI companies to purchase NVIDIA's H200 chips. Alibaba Group, ByteDance, and DeepSeek are reportedly expected to receive approval. NVIDIA CEO Jensen Huang recently stated that its China business had virtually fallen to zero, but just two years ago, in 2024, NVIDIA generated $25 billion in revenue from China, accounting for 32% of its total revenue.

NVIDIA's year-to-date gain was 9.6%, significantly lagging behind the iShares Semiconductor ETF (SOXX)'s 87%. Analysts at Bank of America analyzed that the market is underestimating NVIDIA's dominant position, high memory prices, and its ability to absorb pressure from tech companies developing their own chips. They stated, “It appears that NVIDIA's current valuation already reflects approximately 30-35% of negative factors that are difficult to justify based on 2027 and 2028 EPS forecasts.”

Bank of America emphasized, “We strongly disagree with the EPS discount valuation,” adding, “We see this as an enhanced buying opportunity for a unique and sustainably growing company trading at a forward price-to-earnings ratio of 18x, the lowest in seven years.” The 'Buy' rating and $350 target price were also maintained. According to StockTwits, 58 out of 61 analysts covering NVIDIA issued a 'Buy' or higher rating, with an average target price of $301.62, which is 48% higher than the current stock price.

[Key Article Summary]

-NVIDIA rose 3.7%, marking its third consecutive trading day of gains, amid reports of potential Chinese approval for H200 chip purchases.

-Bank of America maintained its $350 target price and 'Buy' rating, citing NVIDIA's forward P/E ratio of 18x, its lowest in seven years.

-Out of 61 analysts covering NVIDIA, 58 issued a 'Buy' or higher rating, with an average target price of $301.62.

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