Bank of America still sees major upside ahead for Nvidia , despite the stock’s massive year-to-date rally and a series of recent cyclical headwinds that have impaired the semiconductor industry. Pointing to the firm’s “underappreciated” pipeline of generative artificial intelligence products, analyst Vivek Arya reaffirmed Nvidia as his top sector pick in a Monday note. Based on his price objective of $650 per share, Arya’s forecast implies nearly 44% upside from Monday’s closing price of $451.78. Since the beginning of 2023, Nvidia’s forays into AI have vaulted its stock price over 209%. But even Nvidia has not been immune to growing investor concerns around rising U.S.-China tensions, weakening industrial activity, and the sustainability in demand for generative AI products. This month alone, shares of Nvidia have toppled about 8%, while the broader PHLX Semiconductor index has pulled back nearly 3% in that same period. NVDA YTD mountain Nvidia ytd stock chart “In part, NVDA’s compressed valuation already reflects investor concerns about sustainability of genAI capex, geopolitical concerns (China restrictions) and (overstated) competitive risks from AMD / INTC ,” Arya wrote. Over the long term, the analyst expects Nvidia’s earnings potential and several catalysts will continue to drive its share price higher. He warned investors may be “overlooking” these factors, which include the company’s expanding product offerings, especially those within the generative AI space. — CNBC’s Michael Bloom and Samantha Subin contributed to this report
