Wedbush Maintains ‘Outperform’ Rating on Nvidia

Wedbush analyst Matt Bryson reiterated on April 16, 2025 its ‘Outperform’ rating on Nvidia, with a $175 price target.

“China Taketh Away, But Maybe Other Geos Giveth Back?

NVDA Yesterday Issued an 8K Stating

• The U.S. government informed NVIDIA it requires a license to export H20 (or similar) LLMs to China and D5 countries and that this requirement will be in effect for the mid-release future.

• Q1 results are expected to include up to ~$5.6B in charge associated with H20 products for inventory, purchase commitments, and related reserves.

Our View on NVDA

• We believe near-term shipments (likely over 10% of NVDA revenues, an amount that was likely to grow in FQ1 given what we believe was a significant uptick in demand from China to support deeper sovereign investments).

• Even with H20 restrictions, we still expect NVDA to see support across other countries with interest in national LLM development. However, the issue is NVDA’s ability to offset geography linked to the powered silicon (pure volume being even more poorly priced) or lose the government projects given capabilities of other geographies that support LLMs (we believe the Saudi AI Qaree is particularly interesting).

• We are neither increasing nor decreasing our outlook on NVDA revenues in future quarters as a result of yesterday’s news.

Other Points

• Reiterated checks on TSMC’s 2Q25 and Q2 outlook (reviewed today) support the belief that NVDA is maintaining significant wafer builds for existing (we believe the same for TSMC’s slightly less aggressive guidance will come to bear over time as some availability TSMC finds is picked up by NVDA).

• NVDA continues to increase its TAM for AI with HBM (we believe NVDA is increasing pricing targets).

• Improvements to NVDA’s ecosystem (we see Blackwell-optimized HBM adoption and increased support for Ethernet and NVLink solutions).

• We see likely software/firmware expansion and better integration of products into NVDA software stack (Cumulus, AI Enterprise, CUDA).

• Continued improvement in pricing/mix of NVDA GPU systems (numbers point to ~$7K average GPU vs. previous generation/previous revenue of ~$5K average).

• We believe NVDA continues to outperform in ecosystem and future products to support/extend its AI dominance.

Republican Senators AI Diffusion Risks

• Republicans are increasingly vocal about the potential that the AI Diffusion rules hinder U.S. AI efforts (suggesting issues around model restrictions and potential splits in larger training runs in support of offensive AI systems).

• While this group of Senators lacks executive authority, momentum is building for different positioning between House/Senate and the DoD. Republican leaders have already blocked prior Biden initiatives (and the House has effectively restricted future funding tied to export restrictions).

• We believe this bifurcation of politics is leading to potential new rules around LLM training and what diffusion efforts can be supported.

• We view this development as a long-term minor risk for NVDA and as supply to second-tier geos improves, opportunities for H100 and B100 may be less impacted.”

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