By Senad Karaahmetovic
Nvidia (NASDAQ:NVDA) shares closed 7.7% lower on Thursday to mark the first daily close below the $140 mark for the first time since April 2021.
Shares dropped on the chipmaker’s warning that its Q3 revenue guidance may suffer a $400 million negative impact from the U.S. bank on exports of top AI chips to China.
The warning prompted a Daiwa analyst to downgrade Nvidia shares to Neutral from Outperform with a $133 per share price target.
"There are now just too many uncertainties, especially given high valuation, of how much will the USG restrictions impact business, what is the normalized Gaming growth rate, and will the weak economy hurt DC sales. We suggest investors move to the side while valuation resets, and long term growth visibility emerges," the analyst said in a client note.
The analyst also questions why the chipmaker “did not have a better understanding of the channel inventory level.”
On the other hand, a Jefferies analyst estimates the China impact at less than $400 million. Hence, he sees yesterday’s sell-off "as an overreaction," which yields "a particular buying opportunity."
"We don't believe China disappears as a datacenter market, as older GPUs don't require a license, and getting a license for non-military customers appears feasible," the analyst commented in a note.