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Nvidia stock has been in decline since late March, correcting more than 10% from its all-time high.
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BofA analysts say there's nothing to worry about and that the company will continue to dominate the AI chip space.
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None of the factors behind the stock price decline significantly changed NVIDIA's story, they said.
Nvidia's stock price has fallen sharply recently, with the stock having corrected more than 10% from its recent high, but Bank of America has told investors that the chip giant remains in a strong position and should not discount the recent decline. He says there's no need to worry.
BofA analysts led by Vivek Arya said in a note Wednesday that they remain bullish on Nvidia despite an 11% decline since late March, and that the company is a key player in the fast-growing industry of chips that power artificial intelligence. He said that he expects the company to maintain its top position as a top manufacturer. space.
Analysts note that this is the ninth time ChatGPT's stock has fallen by more than 10% since its debut in November 2022.
The bank maintained its price target of $1,100 per share, which represents a 26% increase in the stock price during Wednesday's trading. The stock traded at $867.62 at approximately 12:45 p.m. Wednesday.
“While there is always the potential for a short-term summer consolidation for NVDA stock (as seen from August to December of last year), the fundamentals remain firmly on track and a period of consolidation (sideways) is always possible. “We believe that trading) tends to set the stock price 'with the potential for a strong move later on,'” analysts wrote in a note.
They believe Nvidia's recent stock decline is due to a rebound in inflation, increased competition from other chipmakers, market volatility, AI stock fatigue, rotation into cyclical sectors, and a move to cut some positions ahead of earnings season. He added that this could be due to a number of factors, including the possibility of . However, these factors did not change the company's story.
Nvidia's latest Blackwell chips aim to improve AI performance by 5x and reduce AI inference costs and energy usage by up to 25x. This, combined with Nvidia's strong corporate foundation, gives BofA analysts even more confidence in the company's ability to maintain and gain market share in the chip space.
Nvidia faces competition from Google and Intel, but the bank believes their processors pose a limited threat to Nvidia's dominance.
Google just announced Axion, an ARM-based server CPU, while Nvidia is developing its own CPU called Grace. However, the bank said Google's new product launches will not impact Nvidia because Nvidia does not sell its CPUs to Google.
Meanwhile, Intel also announced Gaudi 3 accelerators this week. It reportedly boasts 50% better inference performance compared to Nvidia's two-year-old H100 chip. However, Bank of America expects Gaudi 3 to capture less than 1% of the AI accelerator market share.
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