NVDA
📈 Nvidia shares rose on a Bloomberg report that the Trump administration might rescind or ease restrictions on AI chip exports to China.
🧮 The host attempts a quantitative analysis, estimating the previous $5.5 billion revenue impact from curbs could translate to a $3.50 stock price upside if reversed, based on Nvidia’s margins and P/E ratio.
🚀 The potential policy reversal is seen as a significant positive catalyst, not just for the immediate fiscal year but for ongoing growth in the Chinese market.
@bernardodegarcia:
“What just happened? Wow. Trump is going to rescind the chip restrictions because there’s a debate about AI. Bloomberg just reported this 6 minutes ago. There we have Nvidia up 2%. It doesn’t seem like enough to me, but we could calculate exactly how much it should rise. Nvidia told us it would be affected. In fact, we can calculate it. Let’s use a multiple of 27. Nvidia had warned about a $5.5 billion impact from the US chip curbs. Okay, perfect, $5.5 billion. Let’s see the net margins. From $39.3 billion in revenue, they end up with $22.1 billion in net income. So, the margins are about 57%. Alright. So, if we take these $5.5 billion times 0.57, we’re talking about $3.13 billion. And how many shares does Nvidia have now? 24.4 billion. Okay, so we’re talking about almost 13 cents. 13 cents times 27… well, that’s $3.50 that it should affect it now, more or less what it’s rising now, $3. But the interesting thing isn’t this fiscal year; the interesting thing is this year and the following fiscal years, right? So, we could easily be talking about, imagine, 20% growth in China. So, first year $5.5 billion, second year $6.65 billion, third year, etc. So, well, I wouldn’t consider three, four… maybe they won’t move much more, eh? Which surprises me. It all depends on the growth China has. The Trump administration is going to rescind the export [restrictions]. Wow, the Chinese are already negotiating with Trump, eh? The Chinese are already negotiating with Trump, or well, Trump with the Chinese, because there’s no comment. I don’t know if you’re seeing it here. There’s no Trump to be seen here. This just came out. Marvelous.”
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