Bank Of America still believes that Nvidia has a lot of upside, despite its massive year-to date rally and recent cyclical headwinds which have affected the semiconductor industry. Vivek Arya, an analyst at Bank of America, reaffirmed Nvidia’s position as his top pick for the sector in a note he released on Monday. He cited Nvidia’s “underappreciated pipeline” of products that generate artificial intelligence. Arya’s forecast assumes a nearly 44% increase in the closing price on Monday of $451.78 based on his $650 price target per share. Nvidia has seen its stock rise by over 209% since the start of 2023. Even Nvidia is not immune to investor concerns about rising U.S. China tensions, a weakening of industrial activity and the sustainability of demand for generative AI. Shares of Nvidia fell 8% in just one month, while the PHLX Semiconductor Index dropped 3%. NVDA YTD stock chart Nvidia ytd mountain “NVDA’s compressed value already reflects investors concerns about the sustainability of genAI capital expenditure, geopolitical issues (China restrictions), and (overstated competitive risks from AMD/INTC,” Arya wrote. The analyst believes that Nvidia’s earnings potential, as well as several catalysts, will continue to drive the share price up over the long-term. Investors may “overlook” certain factors such as the expanding product offerings of the company, particularly those in the generative AI area. CNBC’s Michael Bloom, Samantha Subin and this report were contributed by CNBC
.