Although Nvidia (NASDAQ: NVDA) provided a streak of impressive earnings quarters, the upward momentum of Nvidia stock was stopped by profit-taking, concerns regarding export restrictions to China, and valuation concerns.
On January 8, the stock had its worst trading day in 5 months — having shed 6.22% of its value to close at $140.14.
At press time, NVDA shares were trading at a price of $138.06, having marked a 0.90% loss on the weekly chart.
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While the Jensen Huang-led venture has run into some difficulties as of late, on the whole, Wall Street is still optimistic. On January 10, a Bank of America (NYSE: BAC) analyst reiterated a previous ‘Buy’ rating for Nvidia stock — and set a $190 price target.
Let’s take a closer look at the researcher’s rationale.
Bank of America analyst reiterates bullish outlook
In fact, BofA was the first high-profile Wall Street firm to raise its price target for Nvidia stock in 2025. Vivek Arya, a senior analyst at the company, gave the stock a ‘Buy’ rating and a $190 price target on January 2, dubbing Nvidia stock a ‘top pick’ ahead of the Consumer Electronics Show (CES) on January 7. If met, the $190 mark would equate to a 37.62% rally from the stock’s current price.
Arya expected to see a slew of new developments at the CES — and the expectations were well founded, as Nvidia revealed robot training tech, a new line of gaming chips, as well as a new deal with Toyota aimed at self-driving.
BofA is not worried about short-term volatility with Nvidia stock
So — why the reiterated rating so soon after, especially with the same price target? On Tuesday, January 7, Bank of America hosted several key Nvidia personnel —Colette Kress, the company’s chief financial officer (CFO), Stewart Stecker, the director of investor relations, and Andrew Nguyen, a senior manager of investor relations and strategic finance.
Following the well-attended investor dinner in Las Vegas, BoFa commented that, on a big-picture level, the firm is now more confident in several growth catalysts. Nvidia’s role as an AI incubator, witnessed by its versatile engagement in robotics, on-premise workstations, and autonomous driving is unmatched by any other merchant or ASIC rival, per the banking giant.
In addition, the analyst noted that the chipmaker is only in the first 20% – 25% of the $1 trillion opportunity presented by transforming traditional architecture to accelerated architecture. He also noted another $1 trillion opportunity in supporting new business models based on generative AI.
Lastly, Arya commented that while the stock could stay volatile until the semiconductor company’s Q4 earnings, slated for February 26, on account of potential China restrictions, the long-term outlook is still favorable. In addition, the analyst highlighted the flagship GPU Technology Conference (GTC), which starts on March 17, as the next big catalyst for Nvidia stock.
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