Stifel maintains NVIDIA stock Buy rating, $180 target

Stifel reiterated its Buy rating on NVIDIA with a $180 price target, citing strong Q1 earnings that surpassed expectations despite H20 export restrictions impacting revenue by an estimated $8 billion. NVIDIA's adjusted gross margin reached 71.3%, slightly above guidance, and Q2 revenue guidance of $4.5 billion exceeded analyst expectations, driven by growth in non-China Data Center revenue and the GB200 product ramp; KeyBanc and Raymond James also maintained positive ratings with price targets of $190 and $165 respectively.

Analysis

NVIDIA (NASDAQ:NVDA) demonstrated robust financial health in its fiscal Q1 2025, reporting revenues of $44.1 billion and an EPS of $0.96, surpassing analyst expectations despite an estimated $8 billion revenue impact from H20 export restrictions. The company's adjusted gross margin for Q1 reached 71.3%, marginally exceeding its own guidance and aligning with a strong trailing twelve-month gross profit margin of 75%; management expressed confidence in recovering to mid-70s gross margins by the fiscal year-end. NVIDIA issued positive Q2 revenue guidance, expecting approximately $45 billion, which was well-received and surpassed analyst forecasts, driven by an anticipated 30% sequential growth in non-China Data Center (DC) revenue from the GB200 product ramp, even as it navigates expected decreases in China DC revenue. The successful ramp-up of Blackwell products, contributing nearly 70% of compute revenues and driving a 73% year-on-year increase in data center revenue, alongside the commencement of GB300 system sampling in May, underscores strong product cycle momentum. Analyst sentiment remains highly positive, evidenced by Stifel reiterating a Buy rating with a $180 price target, KeyBanc maintaining an Overweight rating with a $190 target, and Raymond James raising its target to $165 with a Strong Buy. This optimism is rooted in NVIDIA's fundamental strength, including an "Excellent" Financial Health Score, a perfect Piotroski Score of 9, remarkable 114.2% TTM revenue growth, and its strategic positioning within the rapidly evolving artificial intelligence landscape. Further bolstering this outlook are a robust recovery in the networking segment, securing new customers like META and GCP, and benefits in the gaming sector from new products and an improved supply chain.

Key Decisions for Investors

• Given NVIDIA's strong Q1 earnings beat, positive Q2 guidance of approximately $45 billion, and sustained leadership in the AI sector evidenced by Blackwell's success and upcoming GB200/300 ramps, investors might consider the supportive analyst ratings (Buy/Overweight with price targets up to $190) as a basis for maintaining or initiating long positions.
• Investors should closely monitor the execution of the GB200 and GB300 product transitions, the company's progress towards its targeted mid-70s gross margins by fiscal year-end, and any further developments concerning China export restrictions which pose a headwind to a segment of its data center revenue.
• While the outlook is buoyed by exceptional fundamentals such as a perfect Piotroski score and significant TTM revenue growth, investors should remain cognizant of the high expectations embedded in the current valuation and the semiconductor sector's sensitivity to macroeconomic shifts and geopolitical developments.