We're Raising Our Nvidia Price Target on Resumed China AI Chip Sales
Let's review the positive news for Nvidia and several other Pro Portfolio holdings as CoreWeave kicks off today’s Trump AI event with a $6 billion data center announcement.
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As we collect and review this morning’s earnings reports from JPMorgan Chase JPM, Wells Fargo WFC, and Citigroup C, we wanted to discuss with you the news that Nvidia NVDA is filing applications to sell the Nvidia H20 GPU again. Reportedly, the U.S. government has assured Nvidia that licenses will be granted, and this should not only remove an overhanging question as to the future of Nvidia’s China business but restore revenue that was written off as lost due to government restrictions.
China generated $17 billion in revenue for Nvidia in 2024, roughly 13% of the company's total revenue. In response to this news, we are lifting our NVDA price target to $200 from $185, and reiterating our One rating. We are also thinking this is a positive step in smoothing U.S.-China trade conversations as the two countries work on a larger trade deal.
Lending additional support for our price target increase, as we discussed yesterday, President Trump is slated to announce $70 billion in artificial intelligence and energy investments later today. Ahead of that event, we are starting to see related announcements, including one from key Nvidia customer CoreWeave CRWV. During today’s Pennsylvania Energy and Innovation Summit, hosted at Carnegie Mellon University, CoreWeave will commit up to $6 billion for a Lancaster, Pennsylvania, 100-megawatt (MW) data center that could be expanded to 300 MW.
We suspect there will be similar announcements from other companies as part of Trump’s larger announcement today, much the way we saw with the Stargate announcement in January. Those should reaffirm expectations for AI and data center demand in the coming quarters, and connecting the dots, we see that being a positive demand driver for not only Nvidia and Marvell MRVL shares, but also Eaton ETN, United Rentals URI, and others.
We are also reminded this morning that AI and data center demand isn’t just a U.S. phenomenon, but a global one. In addition to China's demand for Nvidia’s H20 GPUs, Oracle ORCL announced it will invest $3 billion over the next five years in artificial intelligence and cloud infrastructure in Germany and the Netherlands.
At the time of publication, TheStreet Pro Portfolio was long NVDA, MRVL, ETN and URI.
