Nvidia: Analyst Maintains Top Pick Despite Sell-Off, Citing Growth Potential
Despite a significant sell-off, Bank of America (BofA) analyst Vivek Arya has reaffirmed Nvidia (NVDA) as his top stock for 2025. Ahead of Nvidia's earnings report on February 26th, Arya's $190 price target implies a potential upside of 57% from current levels.
Call Earnings a Catalyst for Positivism
According to Arya, Nvidia's earnings call could mark a turning point in investor sentiment due to expectations of:
* Reassurance on Blackwell execution
* Confidence in 60%+ year-over-year growth in data center sales for fiscal year 2026
* Excitement ahead of the GTC Conf. on March 17th
Nvidia's Generational Appeal
Arya has consistently defended Nvidia, considering it a "generational investment." However, market concerns have emerged with the advent of DeepSeek's lower-cost AI model and competition from tech giants like Amazon and Google in the AI chip space.
Valuation Attractive
Despite the sell-off, Arya emphasizes that Nvidia's forward price-to-earnings ratio of 26 times is near historical lows. He highlights the company's solid cloud capex, software moats, and undervalued competitive advantages over ASIC chip players.
Stock Market Impact
Nvidia shares have underperformed the "Magnificent Seven" tech stocks in the past year, declining by 15%. However, the setback has created more attractive valuation levels, according to Arya.