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Investor appetite for Nvidia (NVDA) in general may have cooled a bit lately, but that chill is temporary and the festivities are just beginning, according to one Wall Street semiconductor analyst. .
“I think some of these (issues) are growing pains,” Bank of America analyst Vivek Arya told Yahoo Finance executives on an episode of Yahoo Finance’s Opening Bid Podcast. -As told by editor Brian Sozzi (video above, listen below).
The market’s darling stocks and Dow Jones Industrial Average constituents have fallen 8.5% over the past month. The Dow Jones Industrial Average has fallen modestly over the past month, while the S&P 500 has gained 0.5%.
Aria added: “Look at this big, fine stock. They’ve all had this moment of soul-searching on a regular basis.”
Aria said the soul behind seeking Nvidia stock was concerns about execution issues as it tries to drive cutting-edge innovation and exposure to China ahead of tariffs due to President Trump’s possible return. It is said to be related to several factors, including:
“Some of it is due to inherent forces in companies, and some of it is due to market forces,” Arya said.
The switch to Nvidia’s promotional AI chip Blackwell has not been smooth, which is making bulls nervous, Aria explained.
“The last two quarters have not been pretty as we are experiencing growing pains from one generation of products to a new generation,” Arya said.
Read more: Why Nvidia’s Blackwell won the 2024 Yahoo Finance Product of the Year award
Announced in March at the company’s annual GPU conference, Blackwell was hailed as Nvidia’s most powerful and innovative product. However, delivering the finished idea to the masses in the form of a product proved more difficult.
“What we’ve seen since (March) is that enforcement issues are out of the hands of customers,” he said.
While NVIDIA’s issues with masks and system-level configuration may be resolved, “we’ve now had two quarters where estimates have not been up as expected, with question marks that don’t look like NVIDIA,” he said. Ta. Aria.
Still, Arya argues that NVIDIA’s stock has a lot of upside potential over the long term. Broader Wall Street likely agrees — 94% of sell-side analysts rate Nvidia stock a “buy” or “strong buy,” according to Yahoo Finance data.
All eyes are on the company as it takes further steps to unlock Blackwell into a market hungry for its products. Aria believes Blackwell will reach multi-billion dollar sales in 2025. Additionally, NVIDIA founder and CEO Jensen Huang’s appearance as a keynote speaker at CES 2025 may provide a boost to the stock price in the short term.
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