Nvidia’s Growth Potential Amid Export Challenges: A Buy Recommendation by Aaron Rakers

Wells Fargo analyst Aaron Rakers maintained a Buy rating on Nvidia (NVDA – Research Report) yesterday and set a price target of $185.00.

Aaron Rakers has given his Buy rating due to a combination of factors that suggest Nvidia’s potential for growth despite current challenges. The recent U.S. government export restrictions on Nvidia’s H20 products to China have led to significant charges, impacting the company’s gross margin estimates. However, Rakers notes that Nvidia has historically managed similar situations by including such write-downs in their non-GAAP results, suggesting a potential for recovery in future gross margins.
Furthermore, Rakers highlights the substantial demand from Chinese hyperscalers, which had placed significant orders prior to the ban. This indicates a strong underlying demand for Nvidia’s products, which could bode well for the company’s performance once the geopolitical situation stabilizes. Additionally, the ongoing development and deployment of AI technologies globally provide a robust growth avenue for Nvidia, reinforcing the Buy rating despite the current export challenges.

According to TipRanks, Rakers is a 5-star analyst with an average return of 17.8% and a 55.58% success rate. Rakers covers the Technology sector, focusing on stocks such as Pure Storage, Advanced Micro Devices, and Intel.

In another report released today, UBS also maintained a Buy rating on the stock with a $185.00 price target.