Cantor Fitzgerald Reiterates Overweight on NVIDIA, $200 PT
Cantor Fitzgerald analyst C.J. Muse reiterated on April 15, 2025, a ‘Overweight’ rating on Nvidia. The price target of $200 was reaffirmed.
“Hey Lama, How About A Little Something for the $500B
NVDA filed an 8-K post-close noting that 1Q will now include up to $5.58 of charges associated with H20 products and the US Governments decision to require licenses for NVDA to export to China and D:S countries.
Considering NVDA’s $500B Al infrastructure announcement earlier this week, we are a bit taken aback by this decision so much for “the art of the deal.”
As for the bad news….
Rumors of the H20 ban lift are clearly untrue, there is a fairly major hit to 10 EPS (first blush think now likely tracking closer to $0.76 vs cons $0.93), and the restriction of what amounts to LDD% of Data Center revenues from domestic China clearly will be a meaningful limiter to upside through the year.
As for the good news…
1Q revenues remain intact with only 2wks left (we still think a beat, though smaller than the prior 7 Qs) and mgmt. is taking a conservative approach here to completely de-risk China.
Also, we believe that as CY25 was tracking well ahead of consensus already, even with fully de-risking China from Data Center revenue and accounting for a $5.58 charge, we still think consensus CY25 EPS of $4.51 is intact (with a clear path to continued growth in CY26).
Longer-term Implications?
It now appears we need to derisk NVDA completely from serving 20% of the Al market in China.
Moreover, with indigenous competition 1-3yrs away from competing with the H20, we view the Administration’s decision to reward local Chinese GPU providers as completely unnecessary and the absolute wrong decision here.
The stock is trading down 6% on the news, and we would be buyers on weakness.
This is but a blip, and the market has been anticipating a de-risking of China and now that has happened.
NVDA is still on track to earn $4.50+ in CY25 with strong growth thereafter in CY26 and beyond.
There is no change to our view on NVDA’s structural positioning as the key enabler of all things Al-as such, we reiterate our Outperform rating as NVDA remains our Top Pick.
What Happened?
Post close NVDA filed an 8-K noting that 1Q will now include up to $5.58 of charges associated with H20 products and the US Governments decision to require individual company licenses for NVDA to export to China and D:5 countries.
This license requirement was noted to be in effect “for the indefinite future.”
The “$5.58 in charges will be roughly split between inventory write-downs and non-cancellable purchase commitments (think dies or HBM designed specifically for H20 that are not fungible to other SKUS).
We are a bit surprised by the new restriction following NVDA’s $500B AI infrastructure announcement, which we believe was likely negotiated in good faith with the US Government.
We would note that NVDA is assuming that ZERO licenses are granted (…)”
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