Jefferies Reiterates Buy on NVIDIA, $185 PT
Jefferies analyst Blayne Curtis restated on April 15, 2025 its ‘Buy’ rating on Nvidia, with an unchanged $185 price target.
“H20 Restrictions Another Surprise Turn in Trade War
NVDA announced today in an 8K that the USG imposed new export restrictions on their H20 chips.
This is a reversal from previous news reports that NVDA secured the ability to ship the H20 into China.
NVIDIA disclosed today in an 8K filing that the U.S. government (USG) imposed new export restrictions on its H20 chips.
Effective immediately and for the indefinite future, NVDA requires a license from the USG to export the H20 integrated circuits – or any other chips with similar memory or interconnect bandwidth – to China (including Hong Kong and Macau), D:5 countries, or companies headquartered or ultimately controlled in those regions.
It should be noted that no licenses for GPU shipments into China have ever been granted and that the stated reason is concern over potential use or diversion of these chips for supercomputers in China.
NVDA expects to incur up to $5.5B in charges for the April quarter related to H20 product inventory, purchase commitments, and reserves.
NVDA’s China sales have been a roller coaster as expectations rose following an April 9th NPR report that Trump had backed off from pursuing the H20 controls, in exchange for Nvidia investing in Al data centers.
The company just announced that it would build up to S500B worth of Al infrastructure in the US over the next four years. In terms of the impact to July guidance, we believe the majority of the $5.5B (maybe S3B) of the write-down is related to finished goods and WIP vs future supply agreements, which translates into ~$10B of revenue that won’t be recognized.
We don’t know when that lost revenue was to be recognized but we could see a headwind of S5B in the July quarter (vs April).
Sentiment was already fairly low for the July quarter given concerns that the GB200 ramp continues to be slow but this new headwind makes sequential growth much more difficult (St + DDs at $47.8B).
We believe that any diffusion limits are a separate entity vs this H20 restriction and another risk to future sales if the USG pursues this angle further.
We highlighted NVDA’s strong roadmap and multiple positive signals for Al demand coming out of GTC but now don’t see the stock working until these Al rules and tariff impacts are better understood.”
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