Investment Bank Remains Bullish on NVDA Despite Charge

After Nvidia (NVDA) announced that it would take a $5.5 billion charge to its inventory, investment bank Stifel remains bullish on NVDA stock and kept a Buy rating on the shares.

The chip maker will take the charge because it has to purchase “an indefinite license” in order to export its processors to China and China-based firms.

Why Stifel May Still Be Upbeat on NVDA

The tech giant’s long-term outlook remains positive, according to Stifel, which kept its $180 price target on the shares.

In the past, Stifel has been upbeat on the rollout of NVDA’s new Blackwell chips.

At the end of February, in the wake of NVDA’s fourth-quarter results, for example, Stifel reported that the company’s revenue from the Blackwell chips had beaten expectations during Q4.

Stifel’s Take on the Charge

According to the investment bank, the charge suggests that Nvidia’s annual revenue could sink by $8.5 billion to $9 billion. That would equate to a drop of about 4.5% in its annual sales.

Moreover, Stifel thinks that the charge suggests that NVDA may have concerns about its ability to obtain the necessary licenses. Alternatively, the tech giant may be worried that the Trump administration could unveil additional regulations that will harm its export business, Stifel predicted.

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Disclosure: None. This article is originally published at Insider Monkey.