Nvidia’s NASDAQ:NVDA Faces Temporary Headwind, But Core Demand Remains Unshaken
When Nvidia revealed a $5.5 billion charge tied to new U.S. export rules, its share price tumbled from $130 to roughly $107, a near-18 percent slide that sent shockwaves through the chip sector. This impairment stems from unsold H20 GPUs built to comply with prior licensing—but the underlying U.S. data-center appetite for high-performance accelerators is stronger than ever.
Revenue and Profit Surge Fueled by Data-Center AI
Between Q1 2024 and Q4 2025, Nvidia’s top line rocketed from $6.0 billion to $32.1 billion, a 447 percent surge as enterprises and cloud giants ramped up spending on AI training. Operating income exploded from $2.1 billion to $24.0 billion over the same period—an 11-fold leap that lifted operating margins above 60 percent and gross margins north of 70 percent. Those figures underscore that NVDA’s Blackwell and Hopper-generation GPUs command premium pricing amid scarce alternatives.
China Exposure Fading, U.S. Market Takes Center Stage
Although export curbs target Nvidia’s Chinese business, the company’s fiscal Q4 2025 sales to China totaled $17.1 billion—just 13 percent of its $130 billion trailing twelve-month revenues, down from 18 percent a year earlier. The U.S. now accounts for the lion’s share of Nvidia’s sales, insulating its profit ramp from overseas restrictions.
Blackwell Rollout and AI Infrastructure Growth Drive Next Leg
Industry forecasts from IDC anticipate AI-driven infrastructure spending to nearly double by 2026, with server investments topping $200 billion. NVDA’s GB200-based NVL72 Blackwell accelerators—from mass production starting in Q2 2025—are poised to capture a majority of that spend. Competition from AMD’s MI350 won’t scale meaningfully until late 2025, granting Nvidia an extended performance lead in large-scale inference tasks.
Valuation Reset Unlocks 60% Upside to $170
NVDA now trades at 18.8 times consensus 2026 earnings—down from 30× just months ago—despite analysts forecasting 35 percent EPS growth next year. Applying a 30× multiple to 2026 estimates yields a $170 fair-value target, implying 60 percent upside. For real-time charts, see NVDA REAL TIME.
Insider Signals and Peer Comparison Underpin Bull Case
While insiders have modestly trimmed positions ahead of the export charge, executives remain long-term holders, reinforcing confidence in U.S.-driven demand. In a peer group of semiconductor leaders, NVDA’s PEG of 0.67 sits well below AMD’s 0.88 and Intel’s 1.2, highlighting superior growth potential at a compelling price.
Technical Picture and Tactical Positioning
After breaking below its 50-day moving average near $120, NVDA found support at $105 before rebounding to $112. A sustained close above $115 would signal a return to the uptrend, with the April high of $130 as the next hurdle. Absent that follow-through, $100 serves as critical downside support—offering tactical buyers a clear entry zone.
In light of unprecedented data-center demand, robust margins above 60 percent, an accelerating Blackwell ramp, and a valuation reset that embeds only half of consensus growth, NASDAQ:NVDA represents a high-conviction buy for investors positioned to look past the one-time charge and focus on the multiyear AI infrastructure boom.
