Wells Fargo Maintains Nvidia’s $185 PT
Wells Fargo analyst Aaron Rakers reiterated on May 29, 2025, a ‘Overweight’ rating on Nvidia. The price target of $185 was reaffirmed.
“Our Call
NVDA F1Q26 results + F2Q26 guide reinforce confidence in a materializing Blackwell ramp (70% of DC compute), networking momentum, path to mid-70%, & more.
Tomorrow we’re hosting a mtg w/ CFO Colette Kress on Wells Annual Silicon Valley Bus Tour.
What Matters Most
- Data Center Blackwell Ramp Is On: NVDA F1Q26 Data Center rev. at $39.1128, + 73% y/y and +10% q/q vs our 538.98 est (Street @ $39.3B). As previewed, NVDA provided positive comments on building Blackwell ramp — ~ 70% of Compute, or implying ~$248 vs rptd -511B in F4Q25.
- China H20 Ban Impact: NVDA incurred a $4.5B charge vs. initial $5.5B guided. NVDA was unable to ship -$2.5B in F1Q26 (shipped $4.6B): guided -$8B loss in F2Q26 w/no planned replacement
- Networking: Rev at $4.957B, +56% y/y and +64% q/q: driven by growth of NVLink compute fabric via GB200 rack-scale + Spectrum-X momentum at hyperscalers.Spectrum-X now at +$8B/annum w/ Meta and GCP added as customers. We’ve had a lot of lateral q’s on Arista implications (note: we’re mtg w/ ANET tomorrow).
- GM% Guide to 72% +/-50bps; Mid-70% in 2HFY26 (Unchanged): Blackwell ramp driving modest q/q improvement; reiterated return to mid-70% into 2HFY26. Note:F1Q26 net provision ~$4.9B, -11pp.
F2Q26 Guide: NVIDIA is guiding F2Q26 rev at $45B +/- 2%, GM% at ~ 72% +/- 50bps,| and ~$4B opex vs prior Street (VisibleApha) at ~$42.8B / 73.1% / $3.9B.
With an OI&E at ~$450M and a 16.5% (+/- 1%) tax rate, we arrive at an implied F2Q26 non-GAAP EPS at ~$0.94-$1.02 (prior Street @ $0.99/sh).
NVDA expects modest q/q growth across all platforms.
With shares of NVDA now trading at 24x and 21x our CY26 & CY27, respectively — or more notably trading near a trough relative P/E to SOX (2 st. deviations below 5-yr median), we reiterate our OW rating and $185 PT.
We think investor sentiment will now shift back toward a path to +$6/sh. CY26 EPS.
We move our FY26, FY27, and FY28 ests. from $189.6B / $4.07, $242.0B / $5.60, and $285.98 / $6.58 to $200.6B / $4.37, $256.9B / $6.00, and $303.1B / $7.05. Maintain $185 PT.
F1Q26 Results Summary
- NVIDIA reported F1 Q26 rev. / non-GAAP EPS at $44.062B / $0.81 vs our $42.94B / $0.74 est. (Street: $43.38B / $0.87): pre-H20 ban rev. guide at $43.0B (+/-2%).
- F1Q26 GM% at 61% compared to our 58.7% est. & ~71.0% +/- 50bps pre-H20 ban guide (note: ~1,030 bps GM% impact via disclosed $4.54B inventory.)
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