Chinese Chip Stocks Likely to Face Correction in 2025
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Nov 28 2024
0mins
Source: WSJ
China's Semiconductor Industry Outlook: Analysts from Jefferies predict a potential correction in China's semiconductor production equipment stocks in 2025 due to geopolitical risks, particularly concerning U.S. chip export controls that may limit China's access to advanced AI chips and add more companies to the U.S. entity list.
New Zealand's NZX-50 Index Performance: The NZX-50 index rose slightly by 0.1% as investors anticipate further interest rate cuts, with real estate stocks performing well; however, some companies like Sanford experienced declines after trading ex-dividend.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for NVDA is 264.97 USD with a low forecast of 200.00 USD and a high forecast of 352.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 185.410
Low
200.00
Averages
264.97
High
352.00
Current: 185.410
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is a full-stack computing infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. The Company’s segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing platforms and artificial intelligence (AI) solutions and software; networking; automotive platforms and autonomous and electric vehicle solutions; Jetson for robotics and other embedded platforms, and DGX Cloud computing services. The Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems, and Omniverse Enterprise software for building and operating industrial AI and digital twin applications.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Earnings Expectations: With Nvidia's current price-to-earnings ratio at 40, achieving a stock price of $300 requires at least $7.50 in earnings per share, and analysts project $7.66 for FY 2027, providing strong support for the stock's upward trajectory.
- Market Opportunities: As investments in data centers continue to rise, Nvidia stands to benefit from this trend, particularly in 2026, where it is expected to experience dual earnings growth, further solidifying its leadership in the AI sector.
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- Significant Fundraising: The IPO raised $902 million, reflecting strong investor interest in Chinese AI and semiconductor firms, particularly as the public tranche was oversubscribed by more than 700 times and the international offering was nearly 38 times covered.
- Intensifying Market Competition: Despite Montage's successful listing, competition is heating up, with Huawei and its chip unit HiSilicon holding a leading share of the domestic market, suggesting that the push for self-sufficiency will lead to fiercer rivalry within the industry.
- Evolving Policy Landscape: As the Chinese government intensifies efforts for self-sufficiency in advanced chips, the recent approval for Nvidia's H200 imports under specific conditions highlights the uncertainty in policy that could impact market dynamics.
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- Valuation Concerns Intensify: Despite strong performance, the S&P 500 Shiller CAPE ratio has reached historical highs, raising investor concerns about a potential AI bubble, leading some to rotate out of AI and tech stocks.
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- Price Projection: Nvidia's current stock price is around $175, and to reach $300 by year-end, it would need to rise over 70%, a target that appears realistic given the company's growth potential and market conditions.
- Surge in Capital Expenditure: Meta Platforms reported $72.2 billion in capital expenditures for 2025, with expectations to increase this to between $115 billion and $135 billion in 2026, while Alphabet plans to spend $175 billion to $185 billion in 2026, driving significant demand for Nvidia GPUs and enhancing its market position.
- Earnings Expectations: With Nvidia's current price-to-earnings ratio at 40, achieving a stock price of $300 requires at least $7.50 in earnings per share, and analysts project $7.66 for FY 2027, providing strong support for the stock's upward trajectory.
- Market Opportunities: As investments in data centers continue to rise, Nvidia stands to benefit from this trend, particularly in 2026, where it is expected to experience dual earnings growth, further solidifying its leadership in the AI sector.
See More
Montage Technology Shares Surge 60% on Hong Kong Debut, Raising $902 Million
- Strong Debut Performance: Montage Technology's shares surged approximately 60% on their Hong Kong debut, climbing from the offering price of HK$106.89 to HK$171, indicating robust market demand for its high-performance semiconductors and reinforcing its position in the cloud computing and AI sectors.
- Significant Fundraising: The IPO raised $902 million, reflecting strong investor interest in Chinese AI and semiconductor firms, particularly as the public tranche was oversubscribed by more than 700 times and the international offering was nearly 38 times covered.
- Intensifying Market Competition: Despite Montage's successful listing, competition is heating up, with Huawei and its chip unit HiSilicon holding a leading share of the domestic market, suggesting that the push for self-sufficiency will lead to fiercer rivalry within the industry.
- Evolving Policy Landscape: As the Chinese government intensifies efforts for self-sufficiency in advanced chips, the recent approval for Nvidia's H200 imports under specific conditions highlights the uncertainty in policy that could impact market dynamics.
See More
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- Stock Surge: Costco's shares have rallied 16% at the start of 2026, closing at $1,000, indicating a rebound in investor sentiment as it approaches its all-time high of $1,078.
- Earnings Expectations: The company is set to release its earnings on March 5, with market expectations leaning towards continued strong performance, as evidenced by an 8.3% revenue increase and a 6.4% comparable growth rate reported for the period ending November 23, 2025.
- Sales Growth: In the crucial holiday month of December, Costco reported a 7% comparable sales growth across all regions, which, while not a significant acceleration, suggests a solid performance in the upcoming earnings report, boosting market confidence in its future results.
- Valuation Concerns: Despite the recent stock price increase, Costco's P/E ratio stands at 54, significantly higher than the S&P 500 average of 25, indicating that the stock is grossly overvalued, leading analysts to advise caution for investors ahead of the earnings release.
See More
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- Market Performance of AI Stocks: In recent years, AI stocks have driven the S&P 500 to three consecutive years of gains, with companies like Nvidia and Palantir reporting double and triple-digit revenue growth, showcasing the revolutionary potential of AI technology across various sectors.
- Valuation Concerns Intensify: Despite strong performance, the S&P 500 Shiller CAPE ratio has reached historical highs, raising investor concerns about a potential AI bubble, leading some to rotate out of AI and tech stocks.
- Sustained Demand: Chip manufacturers like Taiwan Semiconductor and AMD reported double-digit revenue growth, indicating strong demand for AI products, particularly as TSMC's close collaboration with cloud providers offers clear insights into market demand.
- Long-Term Investment Opportunity: Although AI stocks have recently declined, analysts suggest this could represent a once-in-a-decade buying opportunity, especially as AI technology remains in its early stages, with significant future applications in robotics, drug discovery, and autonomous vehicles.
See More
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- Stellar Stock Performance: Sandisk's stock has skyrocketed by 1200% over the past six months, meaning an $8,000 investment would now be worth approximately $105,000, reflecting strong market demand and investor confidence in the tech sector.
- Earnings Beat Expectations: In its January earnings report, Sandisk posted an adjusted EPS of $6.20, significantly exceeding analyst expectations of $3.62, while revenue reached $3.03 billion, well above the anticipated $2.69 billion, indicating robust operational performance.
- Future Growth Potential: With ongoing strong demand for its storage products, Sandisk is already up about 145% at the start of 2026, and its modest valuation suggests it could continue to rise, making it a tech stock to watch for investors.
- Risk Caution: Despite Sandisk's impressive stock performance, the rapid rise could lead to a swift pullback, prompting investors to exercise caution, especially if sentiment in the tech sector shifts, suggesting that those with lower risk tolerance might want to avoid investing.
See More
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- Market Share Leadership: Nvidia commands approximately 90% of the AI data center processor market, and this significant competitive edge has led to a 62% year-over-year sales increase in Q3, reaching $57 billion, while diluted earnings per share rose 67% to $1.30, showcasing robust financial performance.
- Blackwell Processor Sales Surge: CEO Jensen Huang noted that sales of the Blackwell processors are “off the charts,” with cloud computing GPUs sold out, indicating that demand for AI processors remains high, driving continued growth in the company's performance.
- Global AI Spending Forecast: Nvidia's management estimates that by 2030, global annual spending on AI infrastructure will reach between $3 trillion and $4 trillion, reflecting the competitive pressure companies face in the AI era, further boosting Nvidia's market demand.
- Increased Spending by Industry Giants: Alphabet, Microsoft, Meta, and Amazon collectively spent $380 billion on capital expenditures last year, with expectations for even higher spending this year, particularly as Alphabet plans to double its capex in 2026 to between $175 billion and $185 billion, highlighting the urgent need for AI computing capacity.
See More
