Nvidia's AI trade is far from over, Bernstein says

Worries that AI trade is "over" is a little premature, Bernstein says while noting that Nvidia's NVDA.O valuation is becoming increasingly attractive

It's been a rough start for NVDA this year along with many of its AI-semiconductor peers, hurt by growth fears, supply chain constraints, tariff and regulatory risks

NVDA trades at ~25 times its 12-month forward earnings, their weakest level in a year and close to 10-year lows, as per brokerage estimates

"Nvidia's de-rating is a little stunning especially since it coincides with the beginning of a new product cycle (referring to Blackwell Chips)" - Bernstein

Blackwell is NVDA's new flagship AI chips

In January, Reuters reported Donald Trump's administration is looking at imposing restrictions on the sale of the H20 chip to China

"Banning the H20 would make no sense as its performance is already well below Chinese alternatives; a ban would simply hand the Chinese AI market completely over to Huawei" - brokerage

Bernstein est. every $10 bln in China datacenter revenue amounts to ~25 cents in NVDA EPS; an outright ban would likely impact earnings in the mid to high single digits

Shares of NVDA up 0.75% at $114.90 premarket

Brokerage maintains NVDA's "outperform" rating with a $185 PT