As semiconductor giant Nvidia (NASDAQ: NVDA) faces mounting pressure from trade restrictions and rising custom chip competition, one Wall Street analyst says investors shouldn’t be rattled.
In an interview on Yahoo Finance’s Market Domination, KeyBanc Capital Markets equity analyst John Vinh said Nvidia is still a buy, emphasizing that the company remains “far ahead of the competition” and offers compelling valueeven amid regulatory overhangs.
“It’s very early stages of generative AI, and Nvidia is leading with a massive advantage,” Vinh noted. “At these levels, the stock is not pricing in a lot — and a lot of the downside is already de-risked.”
A Widening Lead in AI Hardware
Despite increasing chatter about custom AI chips from the likes of Broadcom, particularly those powering Google’s Tensor Processing Units (TPUs), Vinh remains confident in Nvidia’s position.
“Broadcom does have a flagship customer in Google,” Vinh said. “But outside of that, we haven’t seen proof points of other customers deploying competitive chips. Nvidia is still the dominant player.”
Nvidia recently launched its next-gen platforms, the GB200 and NVL72, which Vinh believes further solidify the company’s lead in data center AI computing. These platforms are expected to power the next wave of AI infrastructure buildouts, especially as large language models and generative AI systems continue to scale.
Trade Risks as a Near-Term Overhang
While Nvidia continues to dominate the AI chip space, geopolitical pressures are complicating the outlook. The Trump administration is reportedly considering tightening Biden-era trade rules that already restrict the export of high-end AI chips to China.
A revision of the “diffusion rule”, which aims to curb indirect GPU exports through third-party nations, is expected by mid-May. Vinh acknowledged this as a “near-term overhang”, especially amid reports that Nvidia GPUs are still accessible through gray market channels.
“There’s certainly some angst around how this plays out, especially with access to GPUs still occurring through indirect routes,” he said. “It’s unclear what the final policy will look like, but it remains a concern.”
Valuation Opportunity?
According to KeyBanc estimates, Nvidia’s current valuation doesn’t reflect its long-term AI dominance. After accounting for the expected $12 billion impact from China-related restrictions, Vinh argues the stock is de-risked and now trades at under 20 times forward earnings — a steep discount compared to historical multiples of 35x to 45x.
“This kind of pullback presents a strategic opportunity for long-term investors,” Vinh said. “Once there’s clarity on trade policy and earnings confirm AI demand, the stock could rerate quickly.”
Earnings in Focus
Nvidia is set to report Q1 2025 earnings on May 28, a closely watched event that will likely offer further insight into the adoption of its new AI platforms and demand resilience amid trade headwinds.
Wall Street will also be looking for guidance updates and commentary on customer diversification, particularly as Nvidia deepens partnerships with cloud providers and enterprise AI startups beyond its Big Tech client base.
Despite the policy-driven volatility and heightened competition narrative, Nvidia remains firmly positioned at the center of the AI revolution. For now, John Vinh’s message to investors is clear: Nvidia is not just holding the lead — it’s expanding it.
