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.
Nvidia shares recently declined due to concerns about a broad economic slowdown and a delay in the company's next-generation AI processor, marking its fourth straight weekly decline last Friday. However, Monday's rally highlighted Wall Street's confidence in the continued strength of AI infrastructure development, with Nvidia playing a key role. Analysts at Piper Sandler noted that if the Nvidia chip delay is true, it could benefit rival AMD, which saw its stock rise following the report. Despite the concerns, Nvidia remains a dominant player in the AI accelerator market, projected to hold 80% of the merchant market by 2028.
What History Tells
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.
In other words, waiting for large cloud providers to confess about low AI [return on investment] is a wasted cause — at least until 2026," Arya wrote. "While semiconductor stocks exposed to cloud trends can often get crowded and volatile, business dynamics elsewhere in the semiconductor sector are murkier."
Analysts Bullish on Nvidia
• 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.
• KeyBanc Capital Markets equity research analyst John Vinh believes that if Nvidia's issues are related to supply or timing, investors are likely to overlook them. Vinh asserts that the real concern would be a demand issue, which he doesn't foresee. He expects Nvidia to surpass earnings expectations and raise its guidance, indicating that near-term demand should not be a problem.
• UBS analyst Timothy Arcuri reaffirmed his Buy rating on Nvidia with a $150 price target, noting that any delays in Blackwell customer volume shipments are expected to be short, around four to six weeks. He anticipates that lead customers will have their first Blackwell instances operational by April 2025. Arcuri sees strong demand from AI labs and enterprises as positive indicators. He also believes the market may be underestimating Nvidia's future earnings growth, suggesting that while the market currently expects peak growth in 2025, 2026 is likely to see continued growth based on customer discussions.
What to Focus on Beyond the Fundamentals
Fundamentals are just one of four pillars of investing, with the others being a stock's technical strength, market direction, and risk management. Nvidia's stock is currently 10% below its 50-day moving average after a recent decline. Chart patterns can help determine buy or sell points, and it's advisable to wait until the stock retakes the 50-day line and builds another base before making an initial purchase. Additionally, Nvidia's institutional support and relative strength line could improve.
Source: Investing.com, Investor's Business Daily, Investopedia, MarketWatch, YahooFinance
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
Read more
Comment
Sign in to post a comment
Moomoo News Official Account
How do analysts evaluate the market?
19KFollowers
46Following
39KVisitors
Follow
104309970 : Good evening
Invest With Cici : timely analysis![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
Laine Ford : make that money
BelleWeather : Yes. Yes it is.
TestLa Kopi : Nvidia has regained 55 resoundingly on daily. If CPI is good, I am going celebrate big time
with cold bears, eh...I mean beers. 
No amount of historical data can accurately size up Nvidia's humongous potential in uncharted waters ahead. Only first principle understanding in the architecture of their full stack services and sensitivity to emerging telltale data can help you do so. It's easy to see this, provided you are researching outside Wall Street and far away from CNBS, oops typo again.. I mean CNBC
104309970 : There is a strong power in stocks, and I want to wish you to buy stocks