CICC Still Bullish on NVIDIA

NVIDIA (NASDAQ:NVDA) saw its rating lowered from Buy to Hold by HSBC analysts, who also reduced the price target to $120 from $175, citing concerns about fading pricing momentum in the GPU market.

HSBC had previously turned bullish on NVIDIA in April 2023, betting that the company's dominance in AI chips and its ability to command premium prices were underestimated. For much of the past two years, that thesis held up as NVIDIA surged on the back of strong demand for AI-related hardware.

Now, however, the story appears to be shifting. According to the note, HSBC sees no meaningful increase in average selling prices (ASP) between NVIDIA’s new-generation B200 and B300 GPUs, or between the GB200 and GB300 NVL72 rack architectures, suggesting that the company’s once-powerful pricing advantage may be plateauing.

The analysts also pointed out that NVIDIA’s forthcoming Vera Rubin platform doesn’t deliver notable performance improvements in terms of GPU density, sticking with 72 GPUs per rack—a number unchanged since the Blackwell generation. A substantial leap in specifications may not come until the Rubin Ultra release in 2027, potentially limiting near-term growth catalysts.

With pricing tailwinds losing steam and product specs leveling off, HSBC believes that earnings upside may now be capped, prompting the downgrade and lower valuation outlook.

NVIDIA Corporation, listed on the NASDAQ as NVDA, is a leading player in the technology sector, renowned for its graphics processing units (GPUs) and AI advancements. The company has recently introduced the NVIDIA Blackwell Ultra AI factory platform, a major leap in AI reasoning capabilities. This platform is set to revolutionize AI applications, enhancing training and test-time scaling inference, which are vital for improving AI accuracy.

The Blackwell Ultra platform, built on the Blackwell architecture, includes the NVIDIA GB300 NVL72 rack-scale solution and the NVIDIA HGX B300 NVL16 system. These systems offer 1.5 times more AI performance than the previous NVIDIA GB200 NVL72. This advancement is expected to increase NVIDIA's revenue opportunity for AI factories by 50 times compared to those built with the NVIDIA Hopper.

The NVIDIA HGX B300 NVL16 system is particularly noteworthy, offering 11 times faster inference on large language models. It provides 7 times more compute and 4 times larger memory compared to the Hopper generation. This makes it ideal for complex workloads, including agentic AI and physical AI, which are crucial for applications like robots and autonomous vehicles.

NVIDIA's financial metrics reflect its strong market position. The company has a price-to-earnings (P/E) ratio of 39.76, indicating investor confidence in its earnings potential. Its price-to-sales ratio is 22.13, and the enterprise value to sales ratio is 22.14, both suggesting a high market valuation. NVIDIA's low debt-to-equity ratio of 0.13 indicates a conservative use of debt, while a current ratio of 4.44 highlights its robust liquidity.

Analysts have set optimistic price targets for NVDA. Ruben Roy from Stifel Nicolaus set a target of $180, and John Vinh from KeyBanc set a target of $190, both significantly higher than the current stock price of $117.90. These targets suggest potential price increases of approximately 52.67% and 61.15%, respectively, reflecting positive market sentiment towards NVIDIA's future growth prospects.

Nvidia (NASDAQ:NVDA) delivered yet another standout quarter, exceeding Wall Street’s expectations on both earnings and revenue while also providing a stronger-than-anticipated outlook for the current quarter. However, despite the impressive results, shares saw a more than 2% pullback in early trading on Thursday.

For the quarter, Nvidia posted adjusted earnings per share of $0.89, rising from $0.81 a year earlier, on revenue of $39.3 billion, marking a 78% year-over-year surge. Both figures came in ahead of expectations, with analysts forecasting $0.84 EPS and $38.16 billion in revenue.

The company’s data center unit, which accounts for the majority of its business, reported $35.6 billion in revenue, a 16% increase from the prior quarter, outperforming estimates of $34.1 billion.

Looking ahead, Nvidia projects first-quarter revenue of $43 billion, surpassing Wall Street’s $42.05 billion estimate. The company also expects a gross margin of 70.6%, reflecting continued strong profitability.

Nvidia emphasized that its next-generation AI Blackwell chips are already seeing billions of dollars in sales, as the company ramps up massive-scale production of AI supercomputers. The bullish guidance reinforced confidence in the ongoing AI-driven demand boom, despite rising competition from Chinese AI firms like DeepSeek.

Rosenblatt analysts reiterated a Buy rating on NVIDIA (NASDAQ:NVDA) with a $220 price target, expressing confidence in the company’s upcoming earnings report and its long-term growth trajectory.

NVIDIA is set to release its fiscal Q4 2025 earnings on February 26, and the analysts expect a modest beat and upward revision to guidance, driven by continued strength in AI demand and robust sales momentum.

A key focus for investors will be updates on Blackwell, NVIDIA’s next-generation GPU architecture. The analysts anticipate management will reaffirm that Blackwell shipments will begin in fiscal Q4 2025, with demand continuing to outpace supply well into fiscal 2026. Shipments are expected to accelerate throughout the year, leading to a strong second half of fiscal 2026.

Despite rising competition from GPU and ASIC accelerator rivals, the analysts remain bullish on NVIDIA’s ability to maintain dominance in the AI and data center space, citing the company’s complex and highly valuable product roadmap.

Looking ahead, Rosenblatt sees 2025 as a pivotal year for NVIDIA, with the Blackwell ramp expected to be a key driver of growth. Investors will also be watching for further roadmap updates at the upcoming GTC event in March, where NVIDIA is likely to unveil more details on its evolving AI strategy.

• NVIDIA Corporation (NASDAQ:NVDA) stock drops by 17% due to concerns over DeepSeek's new AI model.
• Citigroup maintains a "Buy" rating for NVDA, with a price target of $175, indicating a potential 40% upside.
• NVIDIA's strong client base and sustained demand for its GPUs and AI hardware suggest a resilient outlook despite market volatility.

NVIDIA Corporation, listed as NASDAQ:NVDA, is a leading player in the technology sector, known for its advanced graphics processing units (GPUs) and AI hardware. The company has been at the forefront of AI development, providing essential components for training and deploying AI models. Despite recent challenges, Citigroup has maintained a "Buy" rating for NVDA, with the stock priced at $120.07 as of February 2, 2025.

Nvidia's stock recently faced a significant decline, dropping by 17% on January 27. This was largely due to concerns over a new AI model from Chinese start-up DeepSeek. DeepSeek's R1 model, trained for just $6 million, competes with more expensive models from companies like OpenAI. This development has raised questions about the future demand for Nvidia's chips, which are crucial for AI applications.

The emergence of DeepSeek's cost-effective AI model has unsettled investors, leading to a 3.67% drop in Nvidia's stock earlier this week. The model's ability to compete with established offerings has sparked debate about the necessity of Nvidia's high-cost data center chips. This has created uncertainty about Nvidia's growth prospects, especially if major tech companies adopt similar AI training techniques.

Despite these challenges, some analysts remain optimistic about Nvidia's future. Citigroup analyst Atif Malik has set a price target of $175 for NVDA, indicating a potential 40% upside from its current price. This optimism is supported by sustained demand from major clients like Microsoft and Meta, who are boosting capital expenditure expectations due to supply constraints.

Nvidia's market capitalization is approximately $2.94 trillion, with a trading volume of 385.2 million shares. The stock has fluctuated between $119.19 and $127.85 recently, with a 52-week high of $153.13 and a low of $66.25. While the market reacts to DeepSeek's advancements, Nvidia's strong client base and continued demand for its hardware suggest a resilient outlook.

Citi analysts reaffirmed a Buy rating on NVIDIA (NASDAQ:NVDA) with a price target of $175, emphasizing the company's continued dominance in the advanced GPU market despite emerging competition in the AI landscape.

Recent developments, such as the introduction of DeepSeek’s R1, a Chinese-made large language model (LLM) touted for its low compute costs and high performance, have prompted investor concerns about potential disruptions to NVIDIA’s GPU dominance. As a result, NVIDIA shares dropped more than 12% intra-day today.

However, Citi raised questions about the feasibility of these claims, highlighting that such advancements likely relied on advanced GPUs for fine-tuning and model creation through techniques like distillation.

While the emergence of competitors could challenge U.S. firms in developing cutting-edge AI models, the analysts pointed to the U.S.’s ongoing access to the most advanced chips as a critical advantage. In restrictive environments, leading AI companies are unlikely to shift away from advanced GPUs, given their superior cost-efficiency and performance scalability.

Further underscoring NVIDIA’s strong position, the analysts cited recent announcements of significant AI capital expenditures, including projects like Stargate, which reflect the sustained demand for high-performance chips. These developments reaffirm the need for NVIDIA’s advanced GPU offerings in powering AI innovation at scale.

With its market-leading technology and strong alignment with the growing AI-driven capex trends, NVIDIA remains well-positioned to capitalize on the ongoing expansion of the AI and compute markets.

DA Davidson analysts reaffirmed a Neutral rating on NVIDIA (NASDAQ:NVDA), with a price target of $135 on the stock. The analysis reflects caution regarding NVIDIA’s growth prospects, particularly as 2025 could mark a peak year for the company’s performance, with 2026 projections appearing challenging.

The analysts reviewed their initial outlook from a year ago, noting that many concerns raised at the time still hold. While NVIDIA has experienced significant growth, the analysts remain among the more cautious voices on Wall Street, with 2026 estimates positioned as the lowest among analysts. This skepticism stems from potential challenges in sustaining current growth trends beyond 2025.

In the shorter term, investor attention is expected to center on supply-side issues. These include export restrictions on sales to China and reported quality concerns with Blackwell GPUs. However, the analysts note that supply constraints could potentially extend NVIDIA’s growth cycle as demand remains robust.

Despite NVIDIA's recent successes, DA Davidson advises caution, emphasizing uncertainties in maintaining momentum into 2026 and beyond.