Nvidia's stock (NVDA) gained momentum in premarket trading on Tuesday, following a 5% rise on Monday, as investors and analysts debated whether the recent downturn in semiconductor stocks has been overstated. Bank of America analyst Vivek Arya highlighted Nvidia as a leading "rebound" candidate, predicting a sector-wide recovery in Q4 2024 as seasonal challenges subside.Despite the semiconductor index (^SOX) declining nearly 18% in the past month and Nvidia’s stock dropping more than 15%, Arya remains optimistic, suggesting that companies like Broadcom and KLA Corporation might also benefit from the anticipated rebound.
Nvidia has faced pressure due to concerns over its next-generation Blackwell chip, which reports indicated might be delayed by three months. This delay could impact major customers like Microsoft, Alphabet, and Meta.
However, Nvidia responded, stating that Blackwell's production is "on track to ramp" in the second half of 2024. Wall Street analysts, including KeyBanc Capital Markets’ John Vinh, expressed confidence that Nvidia will overcome these challenges, emphasizing that the issue appears to be related to supply and timing rather than demand.
UBS analyst Timothy Arcuri maintained a Buy rating and a $150 price target for Nvidia, noting that any delay in Blackwell shipments is likely minimal.
He projected that the first customer deployments of the Blackwell chip would occur around April 2025 and highlighted that AI labs and enterprises are significantly increasing their commitments, signaling bullish prospects for Nvidia.
Arcuri also argued that the market might be underestimating Nvidia's long-term earnings potential, with 2026 possibly seeing further growth rather than the expected peak in 2025. Overall, Wall Street sentiment appears to lean towards a positive outlook for Nvidia, despite recent volatility in the semiconductor sector.