UBS lowered its price target on Nvidia (NASDAQ:NVDA) from $180 to $175 while reiterating a Buy rating, as the firm adjusts expectations to account for a larger-than-anticipated impact from the recent H20 export ban.
Despite the regulatory setback, Nvidia is still expected to slightly exceed its $43 billion Q1 revenue guidance, with Q2 revenue likely to come in just modestly higher. Given that many investors feared a sequential decline, this alone may be enough to maintain market confidence.
UBS sees earnings per share for Q1 around $0.76, below the Street’s $0.89 forecast, largely due to lower gross margins as the company absorbs charges tied to the H20 ban. Still, the tone of Nvidia’s upcoming earnings call on May 28 is anticipated to be upbeat.
Looking ahead, growth is forecast to pick up in the second half of the year as shipments of the next-gen GB300 racks begin in late calendar Q3. Additionally, Nvidia may regain partial access to the Chinese market through a modified Blackwell-based GPU, which could offset some of the lost volume.
However, margin guidance could see slight pressure as Nvidia delays its higher-margin Cordelia boards until next year, continuing with the lower-margin Bianca configuration for now.
UBS also noted potential regulatory shifts, with the AI Diffusion Rule possibly being replaced by a direct licensing model—an outcome that could ultimately favor Nvidia if no strict caps are imposed.
The firm revised its 2026 EPS forecast to $4.22, falling short of the consensus of $4.42, with the discrepancy primarily due to lower margin expectations in the current quarter.
