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Nvidia (NVDA) is an American technology company known for revolutionizing the gaming industry with its cutting-edge graphics processing units (GPUs). In recent years, it has taken notable steps in artificial intelligence (AI) and deep learning, establishing itself as the leader of the recent AI transformation. The company also focuses on data centers, autonomous vehicles, quantum computing, and more.
About Nvidia Stock
Nvidia’s stock is facing negative sentiments at the moment following DeepSeek’s arrival, with the stock down 10% year-to-date and 19% from its 52-week highs. NVDA stock was on a historic run in 2023 and 2024 where it gained 238% and 176%, respectively.
Investors Threatened by Tariffs
President Donald Trump announced that he would delay tariffs on Mexico and Canada until at least March. On the other hand, starting Feb. 4, China faces 10% tariffs on all goods imported to the U.S., and with this, investors are now starting to ponder how tariffs are going to affect the semiconductor sector and Nvidia.
According to a report from Bernstein’s Stacy Rasgon, in 2023, the U.S. imported semiconductors worth $273 billion, with only $7 billion coming from China, Mexico, and Canada. As such, companies shouldn’t feel any “direct” impact as the government looks to impose tariffs, but the three said countries are the largest importers of electrical equipment, vehicles, and machinery, which also involves huge chunks of semiconductor equipment.
For Nvidia, the move could be particularly devastating as last year Foxconn announced its intention to open a mega factory in Mexico for Nvidia’s GB200 chips, and as per Rasgon’s report, the U.S. imports around $39 billion in data processing hardware from China and around $28 billion from Mexico. Hence although the “direct” impact should not be high, an “indirect” impact will most certainly be felt.
But not all analysts are as worried. Wedbush analyst Daniel Ives has labeled these tariffs as a “scare tactic,” while encouraging investors to load up on semiconductor stocks on any pullback. Ives believes that any “short-term” supply chain disruptions will be minimal for Nvidia, Advanced Micro Devices (AMD), and Taiwan Semi (TSM). He believes that retaliatory tariffs from Beijing will be “minimal” in the short term as well.
Analyst Take on DeepSeek
Nvidia’s stock is also still feeling the jitters from DeepSeek’s emergence. Melius Research’s Ben Reitzes had a neutral stance on the development. The analyst claims that cheaper AI models like DeepSeek will eventually help with the adoption of AI.
But on the topic of Nvidia’s shares, he claims the situation to be a bit sticky with high volatility and advises investors to wait until Nvidia decides on whether to reduce spending to facilitate significant investment later.
Nvidia Was Triumphant in Q3
Nvidia published its third-quarter results for fiscal 2025 on Nov. 20, 2024. The company generated total revenue of $35.08 billion, beating analysts’ $33.33 billion estimate and rising 94% year-over-year. This rise in revenue was primarily due to its significant growth in data centers where its revenue peaked 112% YOY to $30.8 billion.
On the earnings side of things, the semiconductor company saw its non-GAAP net income rise 18% from the same quarter last year to $19.31 billion, or $0.81 on a non-GAAP per share basis, surpassing analysts’ $0.75 per share estimates. The company saw its gross margin decline for the second straight quarter to 75% while its cash balance at the end of the quarter rose to $38.49 billion, up from $25.98 billion posted at the end of January.
Despite the solid results, investors were a bit skeptical because of Nvidia’s Q4 revenue guidance of $37.5 billion at the midpoint with a non-GAAP gross margin of 73.5%. However, CFO Colette Kress reassured investors that the company will begin delivery of Blackwell chips in the current quarter while ramping production in 2025.
NVDA Rating by Analysts
Nvidia’s massive gains have made the stock a fan-favorite not only among the public, but also among analysts. The stock is given a “Strong Buy” consensus rating on Wall Street with a mean price target of $178.09, which reflects price upside of about 45% from the current market level.
The AI stock is under the observation of 43 analysts, with 37 “Strong Buy” ratings, two “Moderate Buy” ratings, and four “Hold” ratings.
