We're Upping Our Nvidia Price Target on Saudi Deal and Foxconn Strength
We see more potential catalysts near term that could prompt another such move.
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Stocks are poised to continue their rally Wednesday, led in part by shares of Pro Portfolio holding Nvidia NVDA.
The chipmaker has announced deals with Saudi company Humain, owned by Saudi Arabia’s Public Investment Fund, to work on developing AI models and building data center infrastructure. The multi-year project, estimated to be $15 billion-$20 billion over a multi-year period, speaks to Nvidia CEO Jensen Huang’s comments earlier this year about “Sovereign AI” projects. As part of this agreement, Nvidia and the Saudi Data & AI Authority are expected to deploy Blackwell GPUs for a sovereign AI factory and other solutions. We see this and other such efforts blunting U.S restrictions on AI chips to China.
Nvidia shares and others tied to AI and data center, such as our own Marvell Technology MRVL, are getting additional boost. After reporting record April revenue, Foxconn Technology FXCOF reported first-quarter revenue, highlighted by more than 50% year-over-year growth for AI server revenue. Foxconn management said that it sees revenue nearly doubling sequentially and year over year in the current quarter.
However, Foxconn also softened its outlook for 2025 to “significant growth” from “strong growth,” and we interpret that as reflecting shifting U.S. tariffs and pending trade deals between the U.S. and Taiwan. In early April 2025, the U.S. announced a 32% tariff on imports from Taiwan, but later paused it for 90 days to allow for negotiations. Until a trade deal is hammered out, Taiwan will still have to deal with a 10% trade barrier to the U.S., and if no new agreement is made by early July, the tariff rate will shoot back up to 32%.
Despite those tariffs, the message is that AI server demand for Foxconn, Taiwan Semiconductor TSM, and therefore Nvidia, remains strong. That is prompting us to lift our NVDA price target to $160 from $150, keeping our One rating in play. Coming catalysts for the stock, and potentially our price target, are CEO Jensen Huang’s keynote address on Sunday, May 18 at 11 p.m. ET and the company’s earnings report on May 28.
At the time of publication, TheStreet Pro Portfolio was long NVDA and MRVL.
