Nvidia (NASDAQ:NVDA) stock has gone through quite the shift in sentiment lately. About three months ago, it took a hit after rising trade tensions and new U.S. export rules cut off its AI chip sales to China. With trade tensions easing since then, markets have surged to new highs – and Nvidia has led the charge, soaring more than 80% since April’s bottom. The AI chip giant now tops the market cap leaderboard, holding the title of the world’s most valuable company.
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Naturally, that kind of turnaround has prompted a few mea culpas. One comes from top investor Henrik Alex, who’s ranked among the top 3% of stock pickers on TipRanks. Alex issued a Sell rating on NVDA shares just over three months ago, but his doom-and-gloom scenario is now unraveling.
“As my Sell rating was based on expectations of escalating trade tensions and the company remaining precluded from selling into the Chinese market, I am upgrading Nvidia’s shares from Sell to Hold, Alex explained. (To watch Alex’s track record, click here)
Alex acknowledged Nvidia’s strong fundamentals despite the initial China-related hit. The company posted a record $25.8 billion in free cash flow in Q1 FY2026, while core Data Center revenue rose more than 70% year-over-year. “Even with the export restriction impact, Nvidia managed to start fiscal year 2026 on a strong note,” the investor noted.
Looking ahead, the company is expected to resume shipments to China soon. On top of that, a new next-generation GPU – designed to comply with export rules – is reportedly close to mass production, which could boost growth. Though the supply of the current H20 chip is still limited, the upcoming release of a scaled-down Blackwell model at a lower price point should help drive sales into late 2025 and beyond. There’s also potential upside from shipments of previously restricted H20 inventory.
That said, Nvidia’s valuation is still a sticking point for Alex. The stock is now trading at over 20 times projected fiscal 2026 revenues, not profits. However, from a price-to-earnings perspective, things look more reasonable, especially when factoring in the company’s expected earnings growth, which outpaces most of its ‘Magnificent Seven’ peers.
Against that backdrop, the near-term picture remains favorable. With AI investment showing no signs of slowing and China shipments poised to resume, Nvidia’s fundamentals appear strong.
“Time to admit to a bad call,” Alex concedes. “However, the combination of ambitious valuation and an overheated stock market is keeping me sidelined.”
Wall Street, though, is leaning bullish. Of the 38 analysts tracked by TipRanks, 34 rate NVDA a Buy, 3 say Hold, and just one is bearish. (See NVDA stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.