Stifel Maintains Buy on NVIDIA, $180 Price Target

Stifel analyst Ruben Roy reiterated a Buy rating and $180 price target on NVIDIA (NASDAQ: NVDA).

“Last night, NVDA announced that the U.S. government implemented an export control by means of the requirement of an indefinite license to export H20 processors to China (including Hong Kong, Macau and D:5 countries, as well as to companies headquartered or with parents therein).

The company reported that they will incur a $5.5bn charge to inventory as result.

We think the decision to do so signals either a lack in confidence that licenses will be granted or that no further regulations/controls will be implemented. AMD followed suit this morning with a $800mn charge to inventory related to MI308 products.

The story is still evolving, but these charges imply single-digit percentage hits to our full-year revenue estimates for the respective firms.

In our view, the recent news adds greater uncertainty to already uncertain environment, which furthers near-term pressure and volatility, but we think the longer-term story is still bullish and intact.

Summary of the Situation: Last night, it was announced that NVIDIA would need, per U.S. regulation under the ongoing trade war, an indefinite license to export H20 processors to China (including Hong Kong, Macau and D:5 countries, or to companies headquartered or with an ultimate parent therein) and the company proactively released that they would incur a $5.5bn charge in F1Q26 (ending April 27th) in doing so.

It’s hard to say the news is surprising, given the dynamic nature of our evolving trade and geopolitical stance with China, but the timing of it is, since it follows CEO Jensen Huang’s dinner with President Trump last week that led to easier, not harder regulations for NVIDIA (i.e.

H20 ban was suspended).

We suspect that NVIDIA’s write-down is an indication that the company is cautious toward the license requirement either being granted or being the only implemented regulation; we think it likely signals a lack optimism tied to near-term improvement in the China-related business.

What it Means for NVIDIA: The $5.5bn charge will likely be an impact to inventory, which ended last year at around ~$10bn, with ~$30bn in year-end commitments.

While it would be speculative to presume what inventories will be at the end of this upcoming quarter, the write-down would imply a significant double-digit hit to inventory costs.

It is unclear whether the charge will be treated as cash or non-cash, which would have implications on FCF, but does likely hit COGS.

Our understanding is that H20s operate at a ~60-65% gross margin range, which at a $5.5bn charge, would imply an $8.5bn-$9bn hit to revenue for the year (or about a ~4.25-4.5% hit to our top-line estimate for FY26E).

In our view, this recent development heightens investor uncertainty in an already highly-uncertain environment – i.e. bringing up questions regarding the potential for an H20 ban, impacts on other components such as networking and memory, and whether the cost of the write-down increases through the year.

The issue, however, is that these details are likely still being worked through within the administration as well as management; we expect that we will hear more news from the administration on incremental tariff developments for the sector before NVIDIA’s upcoming earnings on May 28th, but look toward that date for more definitive answers from management themselves.”

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