Chip giant Nvidia (NASDAQ:NVDA) is at risk of losing billions of dollars in AI (Artificial Intelligence) chip orders from China. The enhanced export restrictions on advanced chips, AI technologies, and semiconductor equipment will restrict the company from fulfilling orders exceeding $5 billion from major Chinese enterprises in 2024, as reported by the Wall Street Journal. As a result, NVDA is likely to face significant financial losses.
Don't Miss out on Research Tools:
- Discover the latest stocks recommended by top Wall Street analysts, all in one place with Analyst Top Stocks
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
Per the report, Nvidia had already shipped advanced AI chips to China, as planned for this year. Additionally, the company had been trying to expedite the delivery of some of the 2024 orders before the new restrictions came into force. However, the U.S. government had communicated to the company that the new export restrictions were effective immediately. This means that NVDA will be compelled to cancel 2024 orders for its advanced AI chips from large Chinese companies such as Alibaba (NYSE:BABA).
In response to the latest U.S. export restrictions, Nvidia said that it doesn’t expect these new export regulations to significantly affect its financial performance in the near future. However, Wall Street analysts lowered their price targets in light of the new rules. Citi analyst Atif Malik lowered NVDA’s price target to $575 from $630 on October 18. The analyst sees a low probability of the U.S. government granting export licenses, which could hinder Nvidia’s ability to sell its products in China. Further, Morgan Stanley analyst Joseph Moore cut the price target to $600 from $630 on October 17.
While these analysts lowered their price targets, they maintained a bullish outlook on Nvidia stock. With this backdrop, let’s look at the analysts’ consensus rating on NVDA stock.
What is the Prediction for Nvidia Stock?
Nvidia stock has gained over 181% year-to-date. This includes the recent pullback in its share price due to concerns regarding the new export restrictions. Nonetheless, Wall Street analysts maintain an optimistic outlook about Nvidia stock.
The solid AI-driven demand and Nvidia’s leadership in the AI space will likely drive the company’s top line, especially in the Data Center segment. Further, the company is focusing on broadening its product range and improving its supply chain, which augurs well for growth.
Given these positives, Nvidia stock has received 37 Buys and one Hold recommendation for a Strong Buy consensus rating. Meanwhile, the average NVDA stock price target of $645.53 implies 56.83% upside potential from current levels.
