After dropping 14% since the H20 export ban to China, Nvidia (NASDAQ:NVDA) may be setting up for a rebound, according to Bank of America analysts. Despite near-term headwinds, BofA reiterates a Buy rating and highlights attractive valuations against long-term potential.

Four Overhangs, Now Largely Priced In

China Sales

Exposure: China accounted for ~13-14% of Nvidia’s revenue.

H20 Impact: Baked in a 3–6% data-center sales cut; they view this risk as “de-risked.”

AI Diffusion Rule

Timing: Potential implementation as early as May 15.

Worst Case: Could shave ~10% of sales and up to 11% of EPS.

Gross Margins

Current Pressure: Cuts and cost inflation have compressed margins.

Recovery: BofA forecasts margins improving in the second half as Blackwell scales and Blackwell Ultra ramps.

Cloud CapEx Visibility

Uncertainty: Limited clarity on 2026 spend from cloud service providers.

Outlook: “Needs a few more quarters” for CSPs to provide guidance.

Valuation and Long-Term Upside

Rich vs. Cheap: Trades at 19× CY26 P/E—well below its historical ~30× median.

Adjusted EPS Estimates: Fiscal 2026/2027 forecasts now reflect full China/H20 cuts.

Price Target: Lowered to $150 (from $160), yet BofA views current volatility as a buying window.

Monitoring Nvidia’s Profitability Metrics
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