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Nvidia Analyst Says The AI Party Isn't Over: 'Any Volatility Likely To Be Short-Lived'

Bank of America equity analyst Vivek Arya continues to hold a positive outlook on Nvidia Corp. (NASDAQ:NVDA), even after the chipmaker's recent ascent, which has made it the world’s largest company, surpassing Microsoft Corp. (NYSE:MSFT). In a note shared with clients on Thursday, Arya noted that while Nvidia’s sharp rise might prompt short-term profit-taking, he believes any resulting “volatility (is) likely to be short-lived,” thanks to the company’s robust fundamentals and attractive valuations. This confidence is due to several factors: Generative AI Hardware Deployment: We’re only in the second year of what could be a 3-5 year cycle for generative AI hardware, presenting a long-term opportunity worth over $300 billion, which is three times the current year. New Blackwell AI Accelerator Systems: Nvidia’s new AI systems, to be launched later this year, have strong demand from cloud customers. Growing On-Premise AI Demand: The demand for enterprise and sovereign AI, along with early stages of software monetization, is increasing. Attractive Valuation: Nvidia is valued at 35-40 times the consensus and about 30 times PE on a bullish earnings scenario of $5 per share, less than the expected 50%+ annual earnings ...