Nvidia’s upcoming Q2 earnings report will be watched heavily by investing experts, as many expect the stock to roar back from its 1-month slump. At press time, NVDA shares are only up a fraction of a percent, but remain up 29% year-to-date. Recently, the Trump administration established a 15% revenue-sharing requirement for AI chip export license approval. The development sent tech stocks, especially in AI, downward.
Many analysts are optimistic that Nvidia’s Q2 earnings report this week will deliver solid results. However, one analyst suggests that one factor could be the end-all-be-all for the report’s overall grade: China. KeyBanc Capital Markets analyst John Vinh believes that if China is included in Nvidia’s outlook for the quarter ahead and future revenue, it could add billions to what Nvidia projects. “If NVDA were to include China in its guidance, we believe it would contribute an incremental $2-3 billion in revenue, Vinh wrote in a new note to clients.
Vinh expects strong Q2 results, driven by demand for Nvidia’s Blackwell GPUs. However, the analyst warned that guidance for Q3 could be conservative, given uncertainty around US export licenses to China. KeyBanc has an Overweight rating for NVDA stock and a price target of $215, up from its previous $190 forecast. Analysts cite Nvidia’s central role in the ongoing AI boom and demand for its GPU supply as factors for the bullish forecast.
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Furthermore, Nvidia’s B30A AI chip China development represents the company’s latest effort to maintain market share despite export restrictions. The new Blackwell architecture-based processor promises superior performance over the current H20 model while navigating complex regulatory requirements. The Blackwell architecture enables enhanced performance metrics compared to the older Hopper-based H20. Nvidia China sales generated 13% of total revenue last year, making regulatory approval crucial for the B30A rollout.
Morgan Stanley analysts suggest that Nvidia stock (NVDA) remains underowned amongst investors, despite being a top megacap performer. Despite being the world’s most valuable company after its recent surge in the last two years, NVDA stock isn’t a top investment choice for investors in megacap stocks. “NVDA is now the most under-owned large-cap tech stock,” Morgan Stanley analyst Erik Woodring wrote in a note. Thus, the latest earnings report could put a dent in that analysis if NVDA stock surges. Currently, Nvidia NVDA is trading near the top of its 52-week range and above its 200-day simple moving average.