Citi analyst Atif Malik reiterated a Buy rating on Nvidia Corp. with a $350 price target. The price target implies an upside of 41.5 percent.
The re-rating follows Nvidia’s termination of the planned acquisition of SoftBank Group Corp.’s ARM Ltd. due to significant regulatory challenges to closing the deal.
The Street largely expected that the deal would not win regulatory approval, Malik tells investors in a research note.
As part of the agreement, SoftBank will retain the $1.25 billion prepaid by Nvidia, and Nvidia will retain its 20-year Arm license, the analyst notes.
Nvidia intends to record a $1.36 billion charge in Q1 of the fiscal year 2023, inclusive of the $1.25 billion prepayments provided at signing, Malik adds.
Nvidia also plans to launch its computer processing unit, Grace, in 2023 and, with the 20-year ARM license, can pursue this strategy without owning Arm, the analyst says.
