The hot Nvidia has still had its target price cut by HSBC.On January 10, Frank Lee, Head of Global Technology Hardware and Semiconductor Research at HSBC, and his team released a report stating that the supply chain issues for Nvidia's GB200 are expected to continue into the first half of fiscal year 2026 (from February 2025 to July 2025), limiting Nvidia's &#34;upside&#34; growth potential in the first half, while facing greater pressure in the second half (from August 2025 to January 2026).However, due to strong market demand for Nvidia's GPU servers, coupled with the possibility that if Nvidia launches a more powerful GB300/B300 platform that exceeds market expectations under pressure in the second half, HSBC expects growth in the second half of fiscal year 2026 may exceed market expectations.According to the report, HSBC maintains a buy rating on Nvidia but has lowered its target price from $195 per share to $185 per share (based on a 32x PE valuation), indicating a 36% upside potential compared to Friday's closing price of $136 per share. Additionally, HSBC has also lowered its earnings per share forecast for Nvidia for fiscal year 2026 by 6%.<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/50177100-dcec-40af-98d6-1e9c00d5deef.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/50177100-dcec-40af-98d6-1e9c00d5deef.png"/><h2>Supply chain issues for GB200 expected to continue into the first half of fiscal year 2026, making &#34;upside&#34; growth difficult to achieve</h2>In a previous report in November, HSBC believed that Nvidia's GB200 NVL rack platform had largely returned to normal and was expected to begin mass production in the first quarter of fiscal year 2026, which Nvidia also confirmed during its earnings call for the third quarter of fiscal year 2025.However, HSBC has now adjusted its expectations, believing that supply chain issues for GB200 still exist, particularly in ODM assembly. HSBC also added that it is currently difficult to pinpoint the specific locations of the GB200 supply chain issues, especially as Nvidia's GB200 rack server architecture becomes increasingly complex. Previously, HSBC had concerns about issues such as copper connection modules from Amphenol, but these problems are expected to be resolved before the first quarter of fiscal year 2026.In summary, HSBC believes that the supply chain issues for GB200 have not been fully resolved and will continue into the first half of fiscal year 2026, which will lead to revenue growth for GB200 being lower than HSBC's previous expectations.However, HSBC expects that the increase in sales of Nvidia's B200 AI GPUs will partially offset the losses caused by the GB200 supply chain issues, thus limiting the downside risk for Nvidia's revenue forecasts for the fourth quarter of fiscal year 2025 and the first quarter of fiscal year 2026 (projected at $38 billion and $41.9 billion, respectively), which are largely in line with market expectations ($38.2 billion and $42.1 billion, respectively).Additionally, HSBC mentioned that Nvidia plans to launch B300/GB300 products in the second half of fiscal year 2026, which may also lead to a slowdown in growth in the first half of fiscal year 2026, as customers may delay purchasing existing products.**In summary, HSBC believes that NVIDIA may find it difficult to maintain a quarterly &#34;outperforming&#34; growth pace of $2 billion in the first half of fiscal year 2026.**<h2>The second half of fiscal year 2026 will face greater pressure, but there is still potential for upside surprises</h2>Due to the low likelihood of &#34;outperforming&#34; growth in the first half of fiscal year 2026, HSBC believes that NVIDIA will face greater pressure in the second half of fiscal year 2026, particularly regarding the growth of GB200 and the launch of B300.As a result, HSBC has lowered its revenue forecast for NVIDIA's data center in fiscal year 2026 by 6% (based on the sale of 35,000 NVL racks), from $253 billion to $236 billion. However, even with the lowered expectations, HSBC's revenue forecasts for NVIDIA in the third and fourth quarters of fiscal year 2026 (at $70.9 billion and $93.7 billion, respectively) remain significantly higher than market expectations (at $51.9 billion and $57.4 billion, respectively).HSBC added that even in a pessimistic scenario, assuming NVIDIA only sells 20,000 to 25,000 NVL racks in fiscal year 2026, its expected data center revenue would still be $197 billion to $210 billion, which is 7-14% higher than the market expectation of $184 billion.It is important to note that in the second half of fiscal year 2026, although HSBC believes NVIDIA will face greater pressure, it also believes there is potential for upside surprises for NVIDIA for two reasons:First, the demand for AI servers from NVIDIA in 2025 is expected to remain stable, especially after Microsoft announced $8 billion in data center capital expenditures. HSBC also believes that the demand for AI data centers in the automotive and robotics sectors will continue to grow, with global capital expenditures for AI servers in hyperscale cloud computing expected to reach $107 billion, and NVIDIA's long-term AI demand outlook has not changed.Second, HSBC expects that if NVIDIA launches a stronger, market-beating GB300/B300 platform in the second half of fiscal year 2026 under pressure and receives a positive response, it could drive greater growth.

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HSBC expects that NVIDIA's "exceeding expectations" growth potential in the first half of the year is limited, which may lead to greater pressure in the second half. However, considering the strong demand for its GPUs and the possibility of launching a more powerful GB300/B300, there is potential for an unexpected increase in performance in the second half

- HSBC has lowered its target price for NVIDIA from $195 to $185, citing ongoing supply chain issues with the GB200 platform expected to persist into the first half of fiscal year 2026.  
- Despite these challenges, strong demand for NVIDIA's GPU servers and potential success of the upcoming GB300/B300 platform could lead to better-than-expected growth in the second half of fiscal year 2026.  
- HSBC maintains a buy rating on NVIDIA, projecting a 36% upside from the current price, while also reducing its earnings per share forecast for fiscal year 2026 by 6%.

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NVIDIA target price downgraded! HSBC: GB200 supply chain issues will continue into the first half, affecting performance