Nvidia (NVDA) Stock: Why This Analyst Sees 40% Upside Despite China Concerns

TLDR

Table of Contents

Nvidia stock edged down 0.5% to $144.77 in premarket trading on Friday, remaining near its record high of $149.43
Malaysian authorities are investigating reports of Chinese companies using smuggled Nvidia AI chips through servers
Barclays analyst raised Nvidia’s price target to $200 from $170, implying 39% upside potential
U.S.-China trade tensions continue to threaten Nvidia’s business, with China accounting for 13% of annual sales
Senate Finance Committee approved increasing semiconductor investment tax credit from 25% to 30%

Nvidia stock dipped slightly in Friday’s premarket trading, falling 0.5% to $144.77. The chipmaker sits tantalizingly close to its January record high of $149.43.

The stock has climbed from lows below $100 in late April. Investors are watching for catalysts to push the company’s market value beyond its current $3.55 trillion.

Nvidia’s influence in artificial intelligence keeps expanding. The company’s venture capital arm participated in TerraPower’s latest funding round, the nuclear developer backed by Bill Gates.

Despite the stock’s strong performance, familiar concerns about Chinese access to Nvidia chips have resurfaced. Malaysian authorities are investigating reports that a Chinese company used servers equipped with Nvidia AI chips, according to The Wall Street Journal.

Nvidia declined to comment on the Malaysian investigation. The company has faced ongoing scrutiny over alleged chip smuggling operations.

CEO Jensen Huang previously stated that Trump administration export restrictions cost Nvidia $15 billion in sales. He argued these limits are counterproductive and will boost China’s domestic chipmaking industry.

Trade Tensions Cast Shadow

U.S.-China trade tensions remain a persistent threat to Nvidia’s business. China represents 13% of the company’s annual sales, making it a crucial market.

Reuters reported that U.S. officials are considering extending existing tariffs on China for another 90 days beyond the August 10 deadline. The Commerce Department is also weighing new restrictions on advanced technology exports.

$NVDA pending the second highest weekly close on record in a bullish weekly trend > 140. After a 13-month consolidation, if it can close > 155 soon, I'd expect a sharp breakout move. pic.twitter.com/GTTgLvfTsc
— Larry Tentarelli, Blue Chip Daily (@bluechipdaily) June 19, 2025

In May, Nvidia reported strong first-quarter results. Adjusted earnings of 96 cents per share on $44.06 billion revenue beat Wall Street expectations of 93 cents and $43.31 billion.

However, the company’s July quarter revenue forecast of $45 billion missed analyst projections by nearly $1 billion. Nvidia noted this figure would have been roughly $8 billion higher without China export restrictions.

Analyst Optimism Grows

Barclays analyst Tom O’Malley raised Nvidia’s price target to $200 from $170, maintaining an overweight rating. The target implies 39% upside from current levels.

After consulting with supply chain sources following Nvidia’s Q1 report, Barclays sees $2 billion in upside for July revenue compared to Wall Street estimates. The firm raised its Compute segment forecast to $37 billion from $35.6 billion.

Blackwell capacity reached 30,000 wafers per month in June. This fell short of Barclays’ earlier forecast of 40,000 wafers, but the analyst remains optimistic about second-half 2025 demand.

The supply chain sounds positive about growing demand from agentic AI applications. Utilization remains strong despite the temporary production shortfall.

Wall Street’s average price target on Nvidia stock stands at $172.36 according to TipRanks. The high forecast reaches $210.00 while the low sits at $100.00.

Recent positive developments include the Senate Finance Committee’s approval to increase the semiconductor investment tax credit from 25% to 30%. This change would benefit chipmakers in Nvidia’s supply chain, potentially improving pricing.

The stock rebounded after the U.S. and China agreed to temporarily slash tariff rates. The Trump administration’s decision to scrap Biden-era AI diffusion rules also boosted sentiment.

News that Nvidia will supply AI chips to Humain, a Saudi Arabian tech firm, provided another lift in May. The company’s venture capital activities continue expanding its AI ecosystem reach.

Nvidia shares have gained 7.3% year-to-date despite the ongoing regulatory uncertainties. The stock closed at $144.12 on June 17, just below its all-time high.

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