Nvidia Is Massively Hiking GPU Prices. What Does That Mean for NVDA Stock?

Globe and Mail

17-05-2025

Nvidia (NVDA) is back in the headlines for reportedly raising prices across its entire line of GPUs. The company, according to a fresh report by Digitimes Taiwan, has lifted prices by 5%–10% for gaming GPUs and by as much as 15% for its AI GPUs, which include the H200 and B200. The price hike has been driven by tariffs, a ban on the sale of advanced AI chips to China, and mounting production costs associated with relocating advanced packaging to the U.S.
Even in the face of these headwinds, Nvidia's core chip business based on AI remains robust, fueled by hyperscale demand and sovereign AI buildouts. CEO Jensen Huang's reported trips to China indicate the high-wire act being navigated by the company. With its next set of earnings scheduled for late May, investors are waiting anxiously. Will these price increases shore up margins or suppress demand?
Shares of Nvidia have rallied by more than 16.4% over the past five days, demonstrating investor confidence in its pricing power and long-term supremacy in the field of artificial intelligence.
About Nvidia Stock
Nvidia (NVDA) is a world leader in visual computing, most recognized for its GPUs for gaming, artificial intelligence, and supercomputing. It is based out of Santa Clara, California, and has a market capitalization of nearly $3.3 trillion, ranking it as one of the most valuable companies globally.
Year to date, NVDA stock is up 1%. Within five days alone, stock has risen by 16.4%, closing again above $130. This follows increased investor demand for AI infrastructure plays and institutional buying headed into the earnings release for Nvidia.
The company's forward price-earnings multiple stands at 33.25x, and its price-sales multiple is 25.36x, which is high relative to historical standards and industry comparables Advanced Micro Devices (AMD) and Intel (INTC). Although these multiples indicate premium valuing, the fact that the company has a leading position in AI and a 55.9% profit margin helps justify that premium.
Nvidia Betas on Earnings — But China Hangover Awaits
Nvidia's latest quarterly earnings results for the fourth quarter of its fiscal 2025 saw the company report an astonishing $22.1 billion net income on $39.3 billion in revenue, crushing Wall Street projections.
However, the company also warned of a $5.5 billion impact on forward earnings related to new restrictions on exporting AI chips to China, specifically the H20 chip, which it originally created to comply with an earlier round of restrictions. Nvidia's management conservatively guided for the first quarter of its fiscal 2026 based on geopolitical risks and tariff effects.
Still, the company highlighted continued strength in U.S. and Middle East demand for its B200 and H200 GPUs, critical components in sovereign AI and hyperscaler expansions. Nvidia also emphasized increased costs from relocating chip packaging to Taiwan Semi's (TSM) U.S. facility, leading to elevated unit pricing across its lineup.
The company will next report earnings on May 28.
What Do Analysts Expect for Nvidia Stock?
Analyst sentiment is still bullish. As compiled by Barchart, 44 analysts follow the stock, with 37 rating it a 'Strong Buy,' two rating it a 'Moderate Buy,' and only four rating it a 'Hold.'
The average price target for Nvidia stands at $166.22, representing 23% upside from its current price. Although this indicates restrained short-term gains, the stock has a Street-high target of $220, based on long-term hopes driven by inference, sovereign AI, and GPU infrastructure supremacy.