Nvidia(US:NVDA) HTSC·2025-04-17 03:00Investment Rating - The investment rating for the company is "Buy" with a target price of $145.00 [7][8]. Core Insights - The report highlights that the restrictions on the H20 chip sales are anticipated by the market, but new regulations may aim to close performance gaps in memory bandwidth [2][12]. - NVIDIA is expected to focus on shipping HGX architecture servers and H20 chips in FY26H1, with a close watch on the GB300 NVL72 production progress [3][12]. - The supply chain is likely to be reshaped due to tariff pressures, with a shift towards production in Mexico or the U.S. being a prevailing trend [4][12]. - The report projects a decrease in FY26 adjusted net profit by 4.7% to $112.1 billion, leading to a reduction in the target price from $160 to $145 [5][18]. Summary by Sections Sales and Market Dynamics - NVIDIA has paused H20 product sales in China and stopped accepting new orders, which is seen as a proactive adjustment to potential export controls [2][12]. - Major clients have completed their initial stockpiling of H20, while smaller clients still have some demand [2][12]. Financial Projections - The report forecasts significant revenue growth, with expected revenues of $206.1 billion in FY26, up from $130.5 billion in FY25, representing a 57.91% increase [6][18]. - Adjusted net profit is projected to reach $112.1 billion in FY26, reflecting a 50.95% increase from the previous year [6][18]. Valuation Metrics - The adjusted PE ratio for FY26 is revised down to 32.1x, with a corresponding target price adjustment to $145 [5][18]. - The report indicates that the gross margin for the H20 chip is approximately 50%, which is significantly lower than NVIDIA's overall gross margin of around 70% [2][12]. Supply Chain and Production - NVIDIA is collaborating with ODMs to enhance the localization of its supply chain in the U.S., with significant investments in production facilities in Mexico and the U.S. [4][12]. - The report notes that approximately 60% of AI servers imported into the U.S. currently come from Mexico, benefiting from USMCA trade agreement exemptions [4][12].