Nvidia Stock 'An Attractive Opportunity,' Analyst Says Valuation Cheap Despite China Restrictions

Semiconductor giant NVIDIA Corporation NVDA has an attractive valuation ahead, even with the potential impact of restrictions on China, says Bank of America analyst Vivek Arya.

The Nvidia Analyst: Arya maintained a Buy rating on Nvidia with a $200 price target.

The Analyst Takeaways: Arya runs through various scenarios to predict the impact on Nvidia's financials and stock price with pending China restrictions in a new investor note.

"Maintain Buy given current 20x implied P/E is well below historical 36x PE and below large-cap Mag-7 peer on PEG basis," he said.

AI Diffusion Rules are set for a deadline of May 15, or "Liberation Day," Arya said in the note. "This regulatory framework, proposed by the Biden administration, attempts to control the access of AI chips beyond a select group of 18 Tier 1 countries."

Arya added that Nvidia could stay volatile ahead of the May 15 deadline.

The analyst lays out the bear and base cases for Nvidia with the China restrictions and gets P/E ratios of 20x for the bull-case and 26x for the bear-case, which are both below the historical average of 36x.

Arya said Nvidia has around 10% direct China data-center exposure, with the rest of China sales coming from less restricted sectors like gaming and auto. The impact from China restrictions could be 0% to 23% of calendar year 2026 earnings per share, the analyst said.

"Once the geopolitical concerns are sized and priced, we expect NVDA to recover, much like the relative recovery we have seen in semicap stocks this year once China exposure was reflected in wafer fab equipment spending."

Nvidia has criticized rules in the past, the analyst added.

Nivida said caps for Tier 2 and Tier 3 countries could harm global innovation, hurt US competitiveness and push countries to Chinese alternatives.

After examining potential scenarios of how much restrictions could hurt Nvidia, Arya maintains a Buy rating.

"We believe the stock is providing a particularly attractive opportunity for one of the most unique, high-quality tech franchises leading the largest and fastest growing secular trends."

NVDA Price Action: Nvidia stock is down 1.3% to $110.00 on Friday versus a 52-week trading range of $75.61 to $153.13. Nvidia stock is down 20.6% year-to-date in 2025.

Read Next: