Wells Fargo & Company is optimistic about the demand for NVIDIA Corporation's (NVDA.US) H20 chips supporting the Q2 performance, and has raised the target price to $220.

Wells Fargo & Company announced that it is raising its target price for NVIDIA Corporation (NVDA.US) from $185 to $220 and maintaining a "Hold" rating on the company. The analyst team led by Aaron Rakers stated that this adjustment is due to strong demand data for the quarter and positive reports regarding the resumption of sales of H20 chips to China. Prior to NVIDIA Corporation's earnings announcement on August 27th, Wells Fargo & Company had raised its second quarter revenue forecast to $48.2 billion (corresponding to earnings per share of $1.06), exceeding NVIDIA Corporation's previous guidance of $45 billion (2%) and higher than the bank's initial forecast of $45.8 billion (corresponding to earnings per share of $1.00). This revision primarily reflects a significant increase in revenue expectations for the data center business raised from $40.7 billion to $43.1 billion, surpassing Wells Fargo & Company's previous forecasts and also higher than the Wall Street consensus of $41.1 billion. The analysts at the bank emphasized that the potential breakthrough in the Chinese market amidst the ongoing expansion of artificial intelligence computing power provides additional support for NVIDIA Corporation's earnings growth. It is worth noting that Goldman Sachs Group, Inc. analyst James Schneider previously issued a research report stating that although expectations for NVIDIA Corporation are already high, he still believes that the company is poised to deliver "above-expectation performance and raise guidance." The bank raised NVIDIA Corporation's target price from $185 to $200 and maintained a "Buy" rating. Schneider emphasized that investors should pay close attention to the earnings guidance, with progress in the Chinese business and changes in profit margins potentially becoming key catalysts for stock price fluctuations. In the report, Schneider wrote, "The three main focus points of this earnings call are Blackwell chip mass production progress in the second half of the year, as well as the development progress of the next generation Rubin chip architecture planned for 2026." The second focus point highlighted in the Goldman Sachs Group, Inc. report is the timeline for the H20 chips targeting the Chinese market. These export-controlled reduced version AI chips, their listing progress, and expected revenue contribution will be important indicators of NVIDIA Corporation's resilience in the Chinese market. The third major focus is on the trend of gross profit margins, particularly whether the company can release profit space by digesting H20 chip inventory. It is important to note that NVIDIA Corporation's stock price has already accumulated an increase of about 34% in 2025, so the management needs to provide strong performance support to sustain the current valuation level.