A Balanced Case For Nvidia: A Bullish Analyst Grows 'More Concerned' For The Chipmaker's Prospects

Nvidia Corp NVDA elaborated on U.S.'s new license requirement for exports into China and Russia, acknowledged Needham analyst Rajvindra S. Gill.
Future A100 (and eventual H100) exports are subject to license requirements.
The company included $400 million in potential data center sales (mainly A100 related) in their 3Q23 guide subject to the new requirements.
In Gill's view, the hardened government stance presents a significant headwind to the business.
Gill lowered his Data Center related estimates to account for this risk.
He reiterated a Buy on Nvidia. His price target moves from $185 to $170 on his reduced FY24 (CY23) non-GAAP EPS estimate of $4.61 (down from $5.00).
The analyst's Buy rating factored in attractive valuation, superior balance sheet, and artificial intelligence capability will be crucial during the COVID-19 outbreak, especially regarding medical research and genomics. Datacenter build-outs are robust as the cloud accelerates throughout the world.
Gill said the data center, the end-market that he views as NVDA's most significant growth engine, is experiencing a recovery as hyper-scale sales have ramped the past few quarters, and visibility has improved.
He expects the competitive dynamics in the data center market will exert pressure on the company's long-term positioning.
However, several industries will transition to AI-based systems faster. Moreover, Gaming sales are expected to rebound post-COVID-19, especially as the number of games with ray-tracing capabilities ramps.
Price Action: NVDA shares traded lower by 1.66% at $137.12 on the last check Friday.
Photo via Wikimedia Commons

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