Nvidia (NVDA) stock closed Friday with a 2% weekly loss as investors continue to sort through what has been a tough few weeks for the hottest trade of the year.
But Wall Street analysts remain confident this week in the long-term prospects of Nvidia, which is now down about 20% over the past month and more than 25% from its record closing high.
Earlier this week, analysts at Piper Sandler called it a “tremendous opportunity” to buy Nvidia, AMD (AMD) and ON Semiconductor (ON) following the recent sector sell-off.
Some analysts also took advantage of this period of selling to revalue the stock.
“I think for 2025… things are pretty well set up,” Antoine Chkaiban, a technology infrastructure analyst at New Street Research, told Yahoo Finance on Thursday. “We know roughly how much [hyperscalers] “We plan to increase our capital expenditures. The plans are already in place.” New Street upgraded Nvidia to “Buy” this week with a $120 price target.
On Friday, chipmaker TSMC (TSM), a supplier to Nvidia, reported a 45% increase in sales in July compared to a year earlier, a sign that demand for AI remains strong.
“We still feel urgent demand across the board, which mitigates the risk of a pause in shipments while customers wait for the next generation of chips to become available in volume,” Chkaiban said.
The hyperscalers — Microsoft (MSFT), Meta (META), Amazon (AMZN), and Alphabet (GOOG, GOOGL) — have all remained consistent in their recent earnings reports about their commitment to investing in AI. And much of that investment is going directly to Nvidia.
“Investors will likely revisit AI-based names because it [semiconductors] “This continues to be the one area where spending is fluid in terms of customer spending, as evidenced by the capex increases from several hyperscalers during this earnings period,” Jefferies analyst Blayne Curtis told Yahoo Finance on Friday.
Rumors of a possible delay in the release of Nvidia’s Blackwell chip added to the pressure on the stock earlier this week. A two-month wait for the chips would not be without consequences, analysts said, but it would not be enough to move the needle on Wall Street’s expectations.
Curtis’ team said in a recent note that Nvidia’s delays “are real, but not game-changing.” The company is expected to report quarterly results in late August.
Analysts and strategists who study markets more broadly also see the recent slowdown in the AI market as an opportunity.
Keith Lerner, chief marketing officer at Truist Advisory, upgraded the technology sector to overweight on Thursday after falling 12% from its mid-July peak, as semiconductors fell nearly 20%. Lerner noted that despite the decline in these stocks, estimates for future earnings in the technology sector continue to rise.
“This suggests that the recent setback is more due to overextended positioning than a change in fundamentals,” Lerner wrote in a note to clients.
“Additionally, in a down economic environment, we expect investors to return to technology, given some of the secular factors…
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