Raymond James Cuts Nvidia’s PT from $170 to $150
Raymond James analyst Srini Pajjuri lowered on April 15, 2025, Nvidia’s price target from $170 to $150, maintaining a ‘Strong Buy’ rating.
“H20 Restriction Not Entirely Surprising; Blackwell Demand Strong
Recommendation
NVDA announced that the U.S. government will now require a license to export previously. compliant H20 GPUs to China (including HK/Macau).
The company expects to take $5.58 of charges in F1Q26 related to inventory / purchase commitments as a result. China accounted for 14% of sales in F4Q25, with H20 likely accounting for a vast majority (80-85% or $4.58).
Management’s decision to take inventory charges suggests that the company does not expect to receive a license.
As such, we are lowering our estimates and target price from $170 to $150.
120 restrictions aren’t entirely unexpected in our view even though recent media reports suggested no imminent ban.
At 27x P/E, we believe the stock is already reflecting the H20 risk (NVDA traded at a 5-year average P/E of -40x prior to ChatGPT-driven Al spending boom).
More importantly, our recent conversations in Asia point to no slowdown in Al spending at hyperscale customers.
Blackwell (GB200) is ramping in volume and G8300 is on track for F3Q shipment, which should help sustain momentum through the year. Reiterate Strong Buy.
Could H20 ban come with withdrawal of Al diffusion rule?
RJ’s Washington Policy Analyst Ed Mills sees the possibility that an H20 ban could lead to a withdrawal or altering of the Al chip caps proposed by the Biden administration (link).
The Biden-era Al diffusion rule, which establishes country caps for Al chip exports, is set to go into effect on May 15.
We believe Nvidia has been lobbying to reduce, change, or remove these caps.
On Monday, a group of 7 Republican Senators sent a letter to Commerce Secretary Lutnick, seeking for the withdrawal and to propose an alternative.
Industry and the senators argue that the rule will harm U.S. leadership in the development of Al.
While we are not currently assuming any changes to the diffusion rule, a potential withdrawal could more than offset China revenue loss for NVDA and put to rest any concerns about Al spending slowdown.
The numbers
We estimate NVDA shipped $4.58 of 120 GPUs in F4025 along with $178 of 1200/ H100 and $118 of Blackwell.
Management guided for China mix to remain flattish in F1Q, implying -$5B revenue for H20.
As such, we are lowering F1Q26 revenue by -$500M and are modeling flattish revenue growth for F2Q. Our FY26E non-GAAP EPS comes down from $4.43 to $3.84 (includes $5.58 charge) and our FY2TE EPS comes down from $5.48 to $5.13.
Valuation
NVDA is trading at 27x FY26E non-GAAP EPS vs. 5-year range of 20-67x and average of 41x.
Our price target assumes 39x FY26E EPS, which we think is appropriate given the company’s GenAl dominance, new product cycle, and intense competition among hyperscale customers.”
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