Nvidia (NVDA) will report results on August 27, with most Wall Street analysts bullish on the stock, thanks to booming AI demand, strong cloud spending, and some relief from recent U.S. export rules. But HSBC analyst Frank Lee is not willing to join the bullish chorus and prefers to remain on the sidelines for now. The 4-star analyst raised his price target to $200 from $125 but kept a Hold rating, stressing that risks tied to China still remain a headwind, despite the “resumption of H20 licensing.”
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China Still Remains the Key Risk
Lee warned that the market may be underestimating how much China could weigh on Nvidia’s future growth. While the restart of H20 chip licensing has improved sentiment, he warned that lower prices tied to U.S. revenue-sharing rules, along with Beijing’s efforts to reduce dependence on American chips, could limit the company’s upside. He believes this could impact Nvidia’s long-term opportunity in China, even as near-term demand stays strong.
Even with his concerns on China, the analyst expects Nvidia’s Q2 and Q3 revenues to come in close to consensus. He forecasts Q2 revenue of $46.7 billion, slightly above management’s $45 billion guide and in line with consensus at $46.3 billion. For Q3, he expects revenues to come in at $53.9 billion, more or less in line with the consensus of $53.3 billion.
He also highlighted that the AI chip market is now larger than earlier expected, thanks to more cloud spending and demand from enterprise and government buyers. Still, he does not expect these results to trigger big upward revisions as long as China uncertainty lingers.
What Is the Target Price of Nvidia Stock?
According to TipRanks, NVDA stock has a Strong Buy consensus rating based on 35 Buys, two Holds, and one Sell assigned in the last three months. At $197.11, the Nvidia share price target implies a 12.38% upside potential.
