Wall Street's top investment firm Wedbush recently stated that nvidia, along with the broader U.S. tech sector- particularly the so-called "Magnificent Seven" that hold significant weight in the Nasdaq and S&P 500- must provide clear and precise guidance on how the ongoing U.S.-China tariff battle and the Trump administration's global tariff policies will impact their fundamental business outlooks.

As the new U.S. earnings season kicks off, Wedbush's analyst team believes NVIDIA and the broader tech sector need to quickly address concerns about how Trump's global tariff policies will affect their fundamentals. If tech companies deliver outlooks as robust as TSMC's (TSM.US)- which downplayed tariff impacts- it could trigger a "super rebound" for the entire tech sector.

Last Thursday, tsmc reported surging AI demand, with net profits jumping 60%. More importantly, despite Trump's global tariff threats, TSMC reaffirmed strong growth projections, maintaining its 2025 revenue growth forecast at around 25%, consistent with its January target. The company also expects AI-related revenue to double.

On tariffs, TSMC stated it has not observed any changes in customer behavior due to U.S. trade policies, striking an optimistic tone amid global uncertainty. The company's plan to double CoWoS advanced packaging capacity- primarily for NVIDIA's AI GPUs- further signals confidence in sustained AI chip demand through early 2026.

Last week, NVIDIA disclosed that the U.S. government blocked sales of its China-specific AI chip, the H20, before licensing approval- a strategic blow to its fundamentals. NVIDIA expects to book up to $5.5 billion in related charges.

Wedbush analysts think NVIDIA's setback may mark the start of turbulence, but they remain long-term bullish on tech stocks, focusing on AI demand and future tech roadmaps. The next 3-6 months will be critical in the U.S.-China trade war. Wall Street has already cut 2025 tech earnings estimates by ~10%, and the June quarter is seen as a 'reset' in this high-stakes poker game.

NVIDIA CEO Jensen Huang met with Chinese officials and business leaders last weekend to discuss China's market prospects and trade war impacts. "China is a vital market for NVIDIA," Huang said, expressing hopes for continued deep collaboration.

NVIDIA shares fell nearly 5% in early Monday trading to around $96.17.

Investors Hesitant to "Buy the Dip" on NVIDIA

Despite NVIDIA's valuation hitting its lowest point in the AI boom cycle (22x P/E, a discount to historical averages), macro and geopolitical risks are deterring dip-buyers. The AI chip leader is caught in a vortex of trade tensions and industry cyclicality.

While NVIDIA's 24% year-to-date drop doubles the Nasdaq 100's decline, Parnassus Investments' tech head Krishna Chintalapalli warns: "The outlook isn't as compelling as it was, and you really have to make a lot of assumptions here, about tariffs, China, hyperscalers, the macro."

The U.S. ban on NVIDIA's H20 chips for China- a product line targeting billions in AI demand- has left a gaping hole in earnings forecasts. Worse, it fuels fears that the AI investment cycle may peak prematurely as trade wars darken economic growth.

Wall Street Stays Bullish on NVIDIA Long-Term

Analysts remain overwhelmingly positive. Per Bloomberg, nearly 90% rate NVIDIA a "Buy," with shares trading ~60% below average price targets- implying one of the highest 12-month return potentials in years. Long-term bulls see the pullback as a buying opportunity.

Deutsche Bank, UBS, and Piper Sandler recently trimmed targets but maintain "Buy" ratings with a $ 135+ outlook. Tip Ranks data shows WallStreet's consensus is a "Strong buy," with no "Sell" ratings. The average 12−month target is $170 (75% upside), while the highest ($200)and lowest ($120) both sit above current levels.