This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.
After weeks of generally morose sentiment, there is budding optimism on Wall Street, energized by a better-than-expected earnings season and a still-resilient American economy. Yet, one Piper Sandler analyst still perceives darkness on the horizon, as illustrated by his latest sensitivity analysis on NVIDIA.
To wit, Piper Sandler analyst Harsh Kumar has now quantified that NVIDIA's data center revenues could take an annual hit of $9.8 billion - equivalent to 6.45 percent of the company's total annual haul from this segment - in the case of a "worst case" scenario, which entails "a slowdown in capex over the coming year" and progressive decoupling from China.
Critically, this ~$10 billion impact on NVIDIA's annual revenues translates to an EPS hit of ~$0.40. Accordingly, Kumar arrives at a worst-case stock price target of $76.25 for NVIDIA shares, based on a 25x multiple. At the other end of the spectrum, Piper Sandler's best-case scenario for NVIDIA entails a stock price target of $126.75. For reference, the stock is currently hovering just below the $114 price level.
For the benefit of those who might not be aware, NVIDIA recently announced that it expects to incur charges of up to $5.5 billion during its fiscal Q1 2026 (which concluded on the 27th of April) resulting from "inventory, purchase commitments, and related reserves" for the China-specific H20 GPU. The Trump administration had formally communicated to NVIDIA on the 09th of April that, going forward, the H20 GPU will be subject to an "indefinite" export licensing requirement. Moreover, this restriction also applies to other ICs bearing similar memory and interconnect bandwidth capabilities.
Of course, today's sensitivity analysis by Piper Sandler comes on the heels of a separate analysis by the market research firm TechInsights, which recently published its expansive take on the dynamics of the tariff-related one-upmanship that currently persists between the US and China, uncovering worrying omens for the broader semiconductor sphere, especially in the case of no significant de-escalation.
Assuming a global US tariff rate of 10 percent, TechInsights believes the broader semiconductor sphere would represent a $844 billion market in 2026, as opposed to a $777 billion market this year. This corresponds to an annual growth rate of 8.6 percent.
However, if the current situation persists, where the US and China have each imposed a tariff rate in excess of 100 percent, TechInsights finds that the global semiconductor market would shrink by 10 percent to $696 billion in 2025, and to $557 billion in 2026, which represents a plunge of around 34 percent vs. the $844 billion market size projected under the base case scenario of a 10 percent global tariff.
NVIDIA shares are almost flat in today's trading session so far. Year to date, the stock is still down around 17 percent.
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
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