Baird Reaffirms Outperform on NVIDIA, $500 Price Target

Baird analyst Tristan Gerra reiterated an Outperform rating and $500 price target on NVIDIA (NASDAQ: NVDA).

“On November 8, Nvidia’s board announced it has launched an independent investigation, assisted by an outside independent counsel, in light of recent reporting that Nvidia’s founder and CEO has been the target of an intelligence effort.

The board has no reasons to believe that either national security or Nvidia’s secrets have been compromised. Management status quo – for now.

We do not think anyone has been prepped up at Nvidia for CEO succession, however the investigation could result in a transition contingency plan being put in place, in our view.

A closed congressional hearing is set for November 18 involving Nvidia’s CEO and the U.S. Congress.

Our view is that the primary outcome of the hearing will pertain to GPU exports and legal loopholes in need of stricter oversight.

With a firmly-established ecosystem, leading AI chip architectures and platforms, and having won the semiconductor architectural battle into data centers since the rise of GPU-based accelerators, execution is the prevailing factor needed to keep Nvidia successful into at least the next several years, in our view.

Nvidia’s ongoing critical pivot, in our view, is the transition into inferencing and agentic AI. We think that transition is well underway and not fully priced in.

Increased exports oversight ahead, no impact to revenue.

In our view, these developments will result in the U.S. government repelling its license allowing Nvidia to ship H200 to China-based customers, removing any chance Blackwell or future generations of AI architectures ship to China, and addressing loopholes enabling shipment of AI chips to Southeast Asia-based data center operators.

In F2Q, H200 shipments to China represented less than 1% of Nvidia’s data center revenue, and these shipments are not embedded in Nvidia’s quarter guidance.

However, Nvidia could incur a charge for existing, ready-to-ship H200 inventory, in our view. Robust demand trends ongoing.

GPU lead times remain stretched near 40 weeks, with ongoing severe supply constraints.

Conversion of Asia-based (ex China) crypto-currency facilities into GPU-based data center operators is now starting to take place in the face of strong demand and the likelihood of data center moratoria in the U.S.

Outperform-rated. Our estimates remain unchanged.”

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