Nvidia (NASDAQ: NVDA) investors have experienced some gut-wrenching volatility this year, and that will likely continue. After soaring as much as 174%, the artificial intelligence (AI) chipmaker plunged as much as 25% and now sits roughly 7% off its all-time high.
The company has a lot riding on the upcoming debut of its Blackwell processor, which promises to take AI to the next level. However, reports that the launch will be delayed have weighed on investor sentiment, holding the stock back.
One Wall Street veteran believes investors are missing the forest for the trees.
Loop Capital says Nvidia is a buy
On Monday, Loop Capital analyst Ananda Baruah reiterated his buy rating and $175 price target on Nvidia stock, which represents potential gains for investors of 38% compared to Monday's closing price. The analyst believes that while Blackwell B200/GB200 AI chips may be delayed, production of the current Hopper AI chips continues to accelerate, achieving greater throughput. As such, the increasing availability of the current Hopper processors -- which are considered the gold standard -- will more than make up for any potential Blackwell delays.
The analyst has a point. Earlier this month, Nvidia addressed the reports, saying, "As we've stated before, Hopper demand is very strong, broad Blackwell sampling has started, and production is on track to ramp in [the second half of 2024]. Beyond that, we don't comment on rumors."
The rubber meets the road
On Wednesday, Nvidia is scheduled to report the results of its fiscal 2025 second quarter (ended July 30), and investors will be watching the proceedings with keen interest. Management is guiding for revenue of $28 billion, an increase of 107% year over year. Wall Street is even more bullish, with analysts' consensus estimates of $28.6 billion.
To be clear, at 46 times expected earnings, there's a lot of growth baked into Nvidia's current stock price. Management's outlook and comments regarding the broader state of AI adoption will likely be far more critical than the release date of a specific chip. I agree that Nvidia stock remains a buy.
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Danny Vena has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
Is Nvidia Stock Going to $175? 1 Wall Street Analyst Thinks So. was originally published by The Motley Fool