/Nvidia%20logo%20on%20phone%20screen%20with%20stock%20chart%20by%20xalien%20via%20Shutterstock.jpg)
For investors closely following Nvidia (NVDA), a pivotal date looms on the horizon: May 15. This isn’t just another day on the calendar, but a critical juncture that could shape the trajectory of Nvidia’s stock in the weeks and months to follow. Bank of America has issued a note of caution to investors, forecasting a period of volatility leading up to this date. The reason? The U.S. government is set to roll out its new tiered AI chip export restrictions, known as the AI Diffusion Rule. Given Nvidia’s exposure to China via its H20 GPU line, uncertainty around how these rules could affect the company has investors on edge.
So, how should Nvidia investors approach the coming weeks? Is May 15 the end of the turbulence or merely a milestone in an ongoing rollercoaster? Let’s break down what’s happening, why May 15 matters, and whether NVDA stock deserves a spot in your portfolio today.
About Nvidia Stock
Nvidia (NVDA) is a premier technology firm known for its expertise in graphics processing units and artificial intelligence solutions. The company is renowned for its pioneering contributions to gaming, data centers, and AI-driven applications. NVDA’s technological solutions are developed around a platform strategy that combines hardware, systems, software, algorithms, and services to provide distinctive value. Its market cap currently stands at $2.69 trillion.
Shares of the AI darling have dropped 23.1% on a year-to-date basis, weighed down by concerns ranging from the emergence of DeepSeek to tariffs and the outlook for the global economy.
BofA Warns That NVDA Stock Could Remain ‘Volatile’ Until May 15
According to Bank of America, a major catalyst lies ahead for Nvidia investors. On March 27, BofA analyst Vivek Arya stated that Nvidia shares could remain “volatile” until May 15, the date when the U.S. government is set to roll out its new tiered AI chip export restrictions, referred to as the AI Diffusion Rule. “This regulatory framework, proposed by the Biden administration, attempts to control the access of AI chips beyond a select group of 18 Tier 1 countries,” Arya wrote in a note to clients.
The rules would limit certain sales of Nvidia’s chips and potentially shrink its market, yet this event could ultimately have a positive impact on Nvidia stock. This is because the company could rebound from its recent decline once broader geopolitical concerns are fully “sized and priced,” the analyst noted. He compared the situation to that of chip-equipment stocks, which initially suffered due to concerns over exposure to China but experienced a “relative recovery” once investors gained more clarity on equipment spending.
When it comes to China, Nvidia has approximately 10% direct market exposure through its H20 GPUs, which could be affected by the so-called AI Diffusion Rule. The bank noted that the remainder of Nvidia’s exposure to China, through its gaming, automotive, and workstation segments, is unlikely to be significantly impacted.
“There is a wide range of outcomes, and NVDA stock could stay volatile till the May-15 date, aka ‘Liberation Day’ as a catalyst when the impact could be reflected in the stock,” according to BofA. Arya also mentioned several additional catalysts that could drive Nvidia’s stock higher. The analyst highlighted the potential for a rebound in General Motors (GM), which recently announced a partnership with Nvidia, along with the “extraordinary” demand for the company’s new Blackwell Ultra chip.
Bank of America reiterated its “Buy” rating and $200 price target on NVDA stock. “Meanwhile, we believe the stock is providing a particularly attractive opportunity for one of the most unique, high-quality tech franchises leading the largest and fastest growing secular trends,” Arya said.
Nvidia’s Impressive Q4 Results Point to More Upside Ahead
Nvidia’s impressive Q4 earnings results and robust revenue outlook point to substantial long-term growth potential, fueled by the continuing AI revolution. Nvidia reported record fourth-quarter revenue of $39.3 billion, up 12% sequentially and 78% year-over-year. The top-line figure surpassed both the company’s guidance of $37.5 billion and Wall Street’s estimates of $38.2 billion. The bottom-line performance was also impressive, with adjusted EPS of $0.89 beating expectations by $0.04.
Meanwhile, data center revenue, representing 90.6% of total revenue, hit a record $35.6 billion in Q4, rising 16% quarter-over-quarter and 93% year-over-year. Blackwell sales accounted for 31% of the data center segment, with cloud service partners contributing half. Management highlighted that Blackwell sales exceeded their expectations for Q4. Driven by strong demand, the company generated $11 billion from Blackwell, marking the fastest product ramp in its history - unprecedented in speed and scale. CEO Jensen Huang recently noted that data center build-outs will reach $1 trillion by the end of this decade, while hyperscalers are buying Blackwell GPUs at a record-breaking pace, highlighting strong long-term growth potential for NVDA.
The second-largest revenue segment is Gaming, which was the company’s primary revenue source back in FY21. Nvidia historically holds a significant advantage in raw graphics processing performance, competing mainly against Advanced Micro Devices (AMD). Still, this segment underperformed in the most recent quarter, as revenue declined 22% sequentially and 11% year-over-year to $2.5 billion, partly due to supply chain issues. Management anticipates strong sequential growth in Q1 as supply improves.
Among other business segments, Automotive and Robotics stood out, as revenue rose 27% sequentially and 103% year-over-year to $570 million in Q4. This exceptional performance underscores strong demand for chips used in autonomous vehicles. Also, Professional Visualization revenue grew 5% quarter-over-quarter and 10% year-over-year to $511 million, although the growth was relatively modest.
Another positive aspect is the company’s continued shareholder-friendly policy. Nvidia repurchased $7.8 billion in shares and paid out $245 million in cash dividends during the fourth quarter, returning a total of $8.1 billion to shareholders.
What’s Next for NVDA Stock?
Looking ahead, Nvidia projects Q1 revenue of $43 billion, plus or minus 2%, reflecting a 65% increase year-over-year and a 9% sequential rise. This forecast indicates continued strong demand for the company’s products, particularly GPUs from the Blackwell series.
Analysts tracking the company expect it to deliver a 51.57% year-over-year increase in adjusted EPS to $4.53 for FY26. Also, the chipmaker’s full-year revenue is estimated to grow 56.62% from the previous year to $204.39 billion.
In terms of valuation, NVDA stock looks very attractive at current levels. The stock currently trades at a forward P/E ratio (Non-GAAP) of 24.31x, slightly above the sector median of 20.49x but significantly below its five-year average of 47.79x. I believe this is an exceptionally low multiple for a company that holds a dominant position in one of the fastest-growing industries. Notably, the last time NVDA traded at such a low P/E ratio was before the launch of ChatGPT. In addition, the company’s forward PEG ratio stands at 0.69x, well below the sector median of 1.56x. A PEG ratio below 1x typically signals that a stock may be undervalued compared to its expected growth.
What Do Analysts Expect for NVDA Stock?
Wall Street analysts are overwhelmingly bullish on Nvidia, as indicated by a consensus “Strong Buy” rating. Out of the 44 analysts covering the stock, 38 recommend a “Strong Buy,” two advise a “Moderate Buy,” and four give a “Hold” rating. The mean target price for NVDA stock is $177.19, suggesting strong upside potential of 71% from current levels.
