TLDR
- Nvidia stock trades sideways at $177.93 ahead of Wednesday earnings despite China sales uncertainty
- Chinese government reportedly told domestic companies to stop buying Nvidia’s H20 processors
- Stifel raises price target to $212 from $202, citing resumed H20 shipments and GB300 demand
- Analysts expect another beat-and-raise quarter powered by Blackwell GPU deployments
- Second quarter likely had zero China revenue contributions despite reversed export controls
Nvidia shares remained flat in premarket trading Monday as investors weighed mixed signals about the company’s artificial intelligence chip sales in China ahead of Wednesday’s earnings report.
The stock traded at $177.93, little changed from Friday’s close. Shares gained 1.7% during Friday’s broad market rally.
The semiconductor giant faces questions about its ability to maintain sales momentum in China. Recent reports indicate the Chinese government told domestic companies to stop purchasing Nvidia’s H20 processors.
Nvidia has reportedly instructed some partners to halt work on H20 processor manufacturing. The Wall Street Journal cited people familiar with the matter in reporting these developments.
The company hasn’t directly addressed the H20 production reports. Nvidia previously told reporters it constantly manages its supply chain to address changing market conditions.
Despite the China uncertainty, Wall Street analysts remain optimistic about the earnings outlook. William Blair analyst Sebastien Naji expects “another beat-and-raise quarter powered by volume deployments of Blackwell GPUs and NVL72 racks.”
Naji maintains an Outperform rating with a fair value target of $205. His price target reflects 35 times projected adjusted earnings for fiscal year 2027.
Analyst Upgrades Drive Optimism
Stifel raised its price target to $212 from $202 while maintaining a Buy rating. The firm cited resumed H20 shipments in July and accelerating demand for GB300 infrastructure.
Supply chain discussions point to ramping GB300 orders through year-end. Sustained GB200 demand also supports the bullish outlook.
The analyst firm identified three key investor concerns. These include hyperscaler demand sustainability, potential China export restriction impacts, and possible margin pressure during GB300 production ramps.
Stifel believes Nvidia’s AI infrastructure leadership remains unchallenged. The GB300 specifications offer 50% higher FP4 performance compared to previous generations.
Revenue Projections Point Higher
UBS projects fiscal second-quarter revenue could reach approximately $46 billion. Third-quarter guidance might reach $57 billion if China sales are included.
The second quarter likely generated zero China revenue contributions despite reversed export controls. Guidance for the second half should benefit from H20 revenue re-inclusion.
Nvidia hopes to gain U.S. approval for selling more advanced AI chips than the H20 in China. This represents a potential catalyst for future quarters.
Other semiconductor stocks showed mixed premarket action. Advanced Micro Devices fell 0.7% while Broadcom dropped 0.5%.
Evercore ISI previously raised its price target to $214 from $190. The firm maintained an Outperform rating on continued AI leadership expectations.
UBS also increased its target to $205 from $175. The upgrade reflected growth projections in Nvidia’s data center segment.
Recent product launches include Spectrum-XGS Ethernet technology. This innovation connects geographically dispersed data centers into unified AI computing facilities.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
