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Bank of America says Nvidia is a buy, near the cheapest in 5 years
A recent pullback in shares of Nvidia has opened up an attractive opportunity for investors, according to Bank of America. The bank reiterated Nvidia as a top sector pick and stood by its buy rating. Shares of Nvidia have soared 114% this year, but pulled back approximately 14% in the past quarter as investors rotated out of the high-flying tech sector into smaller, more defensive stocks. In recent days, antitrust concerns have accelerated the downward move. Bank of America analyst Vivek Arya’s $165 price objective is about 55% higher than the stock’s Wednesday closing price of $106.21. NVDA YTD mountain NVDA YTD chart “While market forces could enhance near-term stock volatility, we continue to find NVDA valuation compelling at 27x CY25/FY26E consensus PE (or only ~20x PE at high-end of $5+ CY25 eps estimate). Over the past five years, NVDA has traded in a mid-20s to mid 60s PE, with current multiple in the lowest quartile, more than reflecting [near-term] concerns,” he wrote. A key catalyst for the stock could come in the form of supply chain data points, which would confirm the readiness of Nvidia’s new Blackwell chip shipments, Arya wrote. Longer-term growth opportunities for the stock include gaming and data center demand, he added. While Nvidia has come under some potential antitrust scrutiny, it’s hard to assume a specific material impact until more details are released, Arya said. On Wednesday, Nvidia denied reports that it had received an antitrust subpoena from the Department of Justice. — CNBC’s Michael Bloom contributed to this report.
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