Analysts Continue to Believe in Nvidia Stock’s (NVDA) Long-Term Growth Potential Despite Ongoing Challenges

Semiconductor giant Nvidia (NVDA) has been under pressure due to macro uncertainties sparked by tariff wars, the impact of chip export restrictions to China, and the growing threat of competition from Chinese players like Huawei Technologies. NVDA stock is down more than 13% year-to-date. Despite these ongoing challenges, most analysts remain bullish on Nvidia and believe in its long-term growth potential, backed by solid execution, robust demand for its GPUs (graphic processing units) amid the generative AI (artificial intelligence) wave, and continued innovation.

Meanwhile, Nvidia is reportedly planning to release a downgraded version of its H20 AI chip in the next two months, given the export restrictions on the original model. China is one of the key markets for Nvidia, and the company is making efforts to drive demand in this crucial market. Last week, NVDA stock rose on reports that the Trump administration is contemplating rolling back the Biden-era chip export restrictions.

Nvidia is scheduled to announce its results for the first quarter of Fiscal 2026 on May 28. Analysts expect the company to report a 46% year-over-year growth in Q1 EPS (earnings per share) to $0.89. Further, revenue is estimated to rise 66% to $43.1 billion.

Analysts Stay Upbeat on NVDA Stock Despite Near-Term Headwinds

Heading into Q1 FY26 results, DBS analyst Fang Boon Foo believes that key drivers are in place to drive elevated growth for Nvidia. The 4-star analyst highlighted that management’s Q1 FY26 guidance marked Nvidia’s eighth consecutive quarter of more than $4 billion in incremental revenue guidance to $43 billion, reinforcing the solid demand for its AI chips globally. He also noted that management expects demand for its Hopper and Blackwell AI chips to exceed supply in Fiscal 2026.

Given the ongoing challenges, Foo lowered his price target for Nvidia stock to $160 from $175. However, he maintained a Buy rating on NVDA stock, as he thinks that the near-term impact from DeepSeek seems limited, backed by strong capital spending from hyperscalers and big tech companies in the upcoming year, with consensus indicating peer-leading NTM (next 12 months) revenue and earnings growth of 57% and 52%, respectively.  

Likewise, Bank of America analyst Vivek Arya reiterated a Buy rating on NVDA stock with a price target of $150. The 5-star analyst expects the company to deliver a modest revenue beat for Q1 at $44 billion compared to the Street’s estimate of $43 billion, driven by robust demand for its advanced offerings. However, Arya projects the company’s Q2 guidance to be around $44 billion or a little lower, below the consensus of $46.9 billion, reflecting headwinds like H20 chip export ban to China.

That said, Arya believes that the near-term challenges are manageable and have already been priced into the stock. Despite a largely anticipated EPS reset, Arya remains bullish on NVDA stock due to its compelling valuation and “unwavering support for mission-critical AI infra investments/even raised capex by major US cloud customers.”

Is Nvidia Stock a Buy, Sell, or Hold?

With 34 Buys, five Holds, and one Sell recommendation, Nvidia stock scores a Strong Buy consensus rating. The average NVDA stock price target of $164.35 implies about 41% upside potential.

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