Nvidia Stock Continuously Rebounds as Analysts Call It a 'Top Pick' — But Is It a Buy Now?

$NVIDIA (NVDA.US)$ climbed over 5% on Monday, moving further above the 100 level. Since hitting a two-month low of around $90 during last week's "Black Monday," Nvidia has rebounded by over 20%, returning to the $110 mark. As it heads into its second-quarter report later this month, Nvidia's recent stock action holds a mix of the good and the bad.

Bank of America Securities analysts predict semiconductor stocks, including Nvidia, could rebound in the fourth quarter as seasonal headwinds ease. Chip stocks have struggled in the third quarter due to economic concerns and market volatility, with the $iShares Semiconductor ETF (SOXX.US)$ down nearly 14%. Despite these losses, the ETF has gained over 11% year-to-date. Historically, the SOX index tends to recover starting in October, with strong average returns in the fourth and first quarters. BofA analyst Vivek Arya notes that Nvidia's stock looks like a good play if the sector bounces back, likely in the fourth quarter. However, potential uncertainties from U.S. elections and geopolitical tensions could impact the market later in the year.

• Bank of America Securities analysts highlight Nvidia, $Broadcom (AVGO.US)$, and $KLA Corp (KLAC.US)$ as their top semiconductor stock picks, citing their consistent performance in their respective sub-sectors. Larger chipmakers like Nvidia and Broadcom, with significant exposure to the data-center market, are well-positioned to benefit from increased infrastructure spending by cloud computing giants such as $Microsoft (MSFT.US)$ and $Amazon (AMZN.US)$. Additionally, Nvidia's partners $Arm Holdings (ARM.US)$, $Micron Technology (MU.US)$, and $ON Semiconductor (ON.US)$ could also see substantial gains if demand surges unexpectedly, thanks to their potential to scale sales rapidly.