HSBC Analyst Warns of Risks Tied to China Ahead of Nvidia's Q2 Results

HSBC analyst Frank Lee is cautious on Nvidia stock (NVDA) ahead of Q2 results, despite raising his price target to $200 from $125. Lee is concerned about the impact of China's efforts to reduce dependence on American chips and lower prices tied to US revenue-sharing rules on Nvidia's long-term growth. He expects Q2 and Q3 revenues to come in close to consensus, but does not expect these results to trigger big upward revisions due to ongoing China uncertainty. Lee maintains a Hold rating and advises investors to remain cautious.

Nvidia (NVDA) is poised to announce its Q2 FY26 earnings on August 27, with Wall Street expecting EPS of $1.00 on revenues of $45.7 billion. KeyBanc’s Top analyst John Vinh maintained his Buy rating and raised the price target to $215 from $190, highlighting strong demand for AI products and higher server rack shipments [1].

The 5-star analyst noted that NVIDIA’s Blackwell GPU (B200) saw a 40% rise in supply in the second quarter and is expected to grow another 20% in the third quarter. Additionally, GB200 rack yields are improving at server factories, now close to 85%, leading to a full-year shipment forecast of 30,000 racks, up from 25,000 [1].

Despite the bullish outlook, HSBC analyst Frank Lee remains cautious on Nvidia stock, raising his price target to $200 from $125. Lee is concerned about the impact of China's efforts to reduce dependence on American chips and lower prices tied to US revenue-sharing rules on Nvidia's long-term growth. He expects Q2 and Q3 revenues to come in close to consensus but does not expect these results to trigger big upward revisions due to ongoing China uncertainty. Lee maintains a Hold rating and advises investors to remain cautious [2].

Cantor Fitzgerald analyst C. J. Muse raised his NVDA stock price target from $200 to $240, predicting $48 billion in revenue and $1.06 EPS, while Morgan Stanley’s Joseph Moore upped his target price from $200 to $206, predicting $46.6 billion in revenue and $1.03 EPS [3]. The average Nvidia stock price target for the next 12 months sits at $192, with the most bullish projections seeing the stock hitting $250 [3].

Analysts have also discussed the potential impact of a 15% revenue-sharing agreement between the U.S. government and chip giants Nvidia and AMD. This agreement requires these companies to contribute 15% of their China chip sales to the U.S. government as part of export licensing conditions [4]. While the revenue-sharing agreement has sparked debate, it may have broader implications for other industries, potentially benefiting taxpayers by reducing the national debt.

In summary, while analysts are generally bullish on Nvidia's Q2 earnings, concerns about China's impact on the company's long-term growth remain. Investors should closely monitor the earnings report and subsequent guidance for any updates on the company's strategy to navigate these challenges.

References:
[1] https://www.tipranks.com/news/nvidia-to-report-strong-q2-says-5-star-analyst-lifts-price-target-to-215
[2] https://www.forbes.com/sites/greatspeculations/2025/08/18/buy-nvidia-stock-ahead-of-earnings/
[3] https://finbold.com/analysts-revise-nvidia-stock-price-target-3/
[4] https://www.ainvest.com/news/nvidia-amd-shareholders-key-takeaways-china-updates-2508/