Nvidia (NASDAQ:NVDA) is once again caught up in the China saga, and today that storyline put a bit of pressure on the stock. Nvidia shares dipped around 3% after reports surfaced that China’s Cyberspace Administration had instructed major tech companies, including Alibaba and ByteDance, to halt purchases and testing of Nvidia’s RTX Pro 6000D chip. That chip was crafted specifically for the Chinese market, but while Nvidia’s current forecasts already assume zero contribution from China, the move added new uncertainty about when – or if – the company might be able to reenter that market.
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The mood was further tested by news that Beijing regulators had flagged Nvidia for possible anti-monopoly violations tied to its Mellanox acquisition, showing that the scrutiny extends beyond just chip exports.
Wedbush’s Matt Bryson, an analyst ranked in the top 2% of Wall Street stock experts, points out that the company’s prospects now hinge as much on geopolitics as they do on performance. He highlighted Nvidia’s own admission that restrictions on China are costing it between $2 billion and $5 billion in quarterly sales. Beyond the financial hit, Bryson argued, there’s a broader concern that the U.S. could fall behind in AI development if companies like Nvidia remain locked out of such a pivotal market.
To drive home his point, Bryson leaned on the imagery of panda diplomacy – China’s practice of sending pandas abroad as a gesture of goodwill.
“We believe Jensen and co. are effectively advocating for a return to Panda Diplomacy, albeit with NVDA GPUs and AI coming from the US into China, vs China exporting its giant pandas to the world. And while ostensibly our new estimates build off October guidance (and therefore again implicitly don’t assume any future GPU shipments to China), we see some probability Jensen navigates the currently tricky geopolitical situation to again tap into the China market (presumably with Blackwell based products) creating upside to our estimates,” Bryson noted.
To this end, Bryson rates NVDA shares an Outperform (i.e., Buy), along with a $210 price target. Should the target be met, investors are looking at returns of 23% in the year ahead. (To watch Bryson’s track record, click here)
Bryson is hardly an outlier – most of Wall Street is in the same camp. Of the 39 analysts covering NVDA, 36 rate it a Buy, 2 stay on the sidelines with a Hold, and just one grizzly calls it a Sell. That broad backing translates into a Strong Buy consensus, with a 12-month average price target of $211.11 signaling ~24% upside ahead. (See NVDA stock analysis)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.