KeyBanc analyst John Vinh reiterated an Overweight rating on Nvidia Corp (NVDA  ) with a price target of $650.

Despite updated export restrictions to China and tight supply, the analyst expects Nvidia to report solid results and guidance above consensus expectations, driven by strong ramps for L40S GPUs, non-CoWoS based (est. $2.5 billion - $3 billion in the second half), incremental CoWoS capacity from Amkor, and Taiwan Semiconductor Manufacturing Co (TSM  ), to a lesser extent and mix shift to higher ASP H100 GPUs vs. A100.

Vinh expects minimal near-term impact from the updated China export restrictions, as NVDA should be able to backfill with RoW backlog given extended lead times on H100 (estimated 29-36 weeks to a year, in some cases).

While the analyst expects NVDA to develop compliant GPUs for China (H20, L20, L2), if these AI SKUs end up not being performant, the updated export controls are likely to be a headwind that Vinh estimates to be ~20%, which will likely be conservative given outsized demand for generative AI.

If Nvidia cannot find a compliant and performant GPU to ship to China, the export controls will likely be a headwind in FY25.

The analyst models $82 billion in FY25 Data Center revenue vs. $101 billion prior and total revenue and EPS of $96.8 billion and $20.84.

Vinh's 3Q24 revenue and EPS estimates are $17.0 billion and $3.57 vs. consensus of $16.2 billion and $3.37. 4Q24 revenue and EPS estimates are $20.8 billion and $4.50 vs. consensus of $17.8 billion and $3.77.

Street sentiment on the name is positive, given its unique leadership position in generative AI demand, offset by long-term concerns over the new export controls' impact on China.

Price Action: NVDA shares traded higher by 1.04% at $498.10 on the last check Monday.