NVIDIA stock (NVDA) has led gains among the Magnificent Seven tech stocks since the beginning of the year, after the group’s sharp decline at the end of 2024. The AI chip maker’s stock rose 4.5% on Friday, after rising about 3% on Friday. The day before.
The rise followed a 4% decline from Christmas Eve to New Year’s Eve. This is because large tech stocks fell across the board as the stock market did not have the “Santa Claus” rally that typically occurs from December 24th to January 2nd. Tesla (TSLA) stock is down nearly 13% over this period, while Amazon (AMZN) and Microsoft (MSFT) are down more than 4%. Meanwhile, META and Google fell more than 4%. (GOOG) fell just under 4%, and Apple (AAPL) fell 3%.
Despite the decline in December, NVIDIA stock still ended 2024 up more than 150%. Wall Street analysts remain bullish on the stock, expecting the stock to rise from its current level of $138 to about $173 next year, according to Yahoo Finance data.
Bank of America’s Vivek Arya told Brian Sozzi on Thursday’s Opening Bid podcast that broader market trends and company-specific issues led to the decline in Nvidia stock late last year.
“What we’ve seen in the market is a flow of capital from semiconductors to software,” Arya said, noting that the latter has been less affected by U.S. trade restrictions on goods to and from China. . He added that for NVIDIA, “the last two quarters haven’t been smooth sailing because we’ve been going through growing pains going from one generation of products, which was Hopper, to a new generation of products.” Ta.
Aria was referring to concerns over shipping delays for the company’s new Blackwell artificial intelligence chip.
“In our view, these are short-term issues,” he said. That could create a buying opportunity. While Magnificent Seven’s peers are trading at twice the average earnings growth forecast for 2025, Arya said Nvidia stock is trading at less than one times the company’s consensus earnings growth rate for next year. he pointed out.
Aria rates Nvidia stock a “buy” and expects the stock to rise to $190 over the next 12 months.
Nvidia and its Magnificent Seven stock prices have benefited not only from profit growth but also from investors’ huge bets on artificial intelligence. As Yahoo Finance’s Josh Schafer reported, across nearly three-quarters of reports, the combination of Apple, Alphabet, Microsoft, Amazon, Meta, Tesla, and Nvidia had 33% year-over-year earnings growth in 2024. In contrast, the company’s growth rate was just 4.2%. and 493 other S&P 500 companies, according to FactSet data.
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