Dear NVDA Stock Fans, a Major Relief Catalyst Could Be Coming in July
Late last week, Reuters reported that Nvidia (NVDA) is downgrading its H20 chip to make it eligible for export to China.
This modified version of the H20 chip will be available in July, the AI darling has reportedly told its Chinese customers, including Alibaba (BABA) and Tencent (TCEHY).
The news arrives weeks after President Donald Trump announced new regulation that effectively disabled Nvidia from selling its H20 chip to China. At the time, the chipmaker warned of a $5.5 billion hit to its Q1 earnings due to the said export controls.
Significance of China for Nvidia Stock
Reports of Nvidia working on downgrading its flagship H20 chip to make it export-ready without violating the U.S. regulations indicate the Nasdaq-listed firm remains committed to retaining its business in China.
The company generates a significant chunk of its revenue from the largest Asian economy. Beijing contributed a whopping $17 billion to make up roughly 13% of NVDA’s overall revenue in 2024.
In a recent interview with CNBC, Jensen Huang, its chief executive, agreed that inability to address China’s AI market would be a “tremendous loss” for Nvidia.
Including today’s price action, NVDA shares are down over 20% versus their year-to-date high. Shares are up 4% in morning trading on news of a U.S.-China tariff pause.
UBS Says NVDA Has Upside to $175
Despite near-term challenges facing Nvidia, including macro uncertainty and export restrictions, UBS analyst Timothy Arcuri remains bullish on the AI stock.
Arcuri reiterated his “Buy” rating on NVDA shares in a research note on Monday. His $175 price target on the chipmaker indicates potential upside of well over 40% from current levels.
On Friday, Taiwan’s monthly export data indicated continued demand for AI-related technology, particularly semiconductors and electronic components, which, the UBS analyst argued, could be a positive indicator for what the future holds for Nvidia stock. However, Acuri cut his price target from $180 to $175 in anticipation of export restrictions weighing on earnings.
Is Nvidia Still a Good Investment for 2025?
Nvidia has struggled in recent months, but it remains the Street’s favorite in 2025.
The consensus rating on NVDA currently sits at “Strong Buy” with a mean target of about $166 suggesting potential upside of 40% from here.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.