Even as Nvidia (NASDAQ:NVDA) is in the midst of a pesky correction, analysts are still long on the chipmaker stock. Indeed, New Street Research upgraded NVDA stock to a “buy” rating while raising its price target to $120 per share.
According to analysts at New Street, the change comes upon recognition of the potential of Nvidia’s yet to be released Blackwell chip line, which is now set to release in the first quarter of 2025.
The upgrade comes as NVDA stock finds itself in the midst of a more than 26% drawdown from its June peak. However, some analysts believe the correction may be a positive for the stock.
“We find the correction healthy overall, recognize some limited and tactical headwinds specific to Nvidia, but overall see the stock moves as an opportunity to gain more exposure,” New Street analysts said.
The analyst firm believes Nvidia is positioned strongly for the quickly moving artificial intelligence (AI) wave, especially in the data center GPU market, which Nvidia dominates.
“We see in-house XPUs doing well against GPUs and being deployed in millions across gigantic in-house captive markets,” the analysts noted.
Additionally, New Street is relatively unconcerned with speculation of new competition from the likes of fellow chipmaker Advanced Micro Devices (NASDAQ:AMD). According to the firm, “none of these players will put material pressure on Nvidia’s dominant position.”
New Street analysts noted the following, per Investing.com:
“We have done a lot of work showing that the best outcome for an in-house XPU or an alternative GPU is to be competitive, i.e. on par with an Nvidia GPU, plus or minus one product cycle. That’s enough to win a right to exist, not a right to win.”
NVDA Stock Gains After Brutal Drop
While NVDA stock has been experiencing a cold front lately, shares are enjoying some love today after the global selloff on Monday. Indeed, NVDA is up 3.78% at the time of this writing, adding to its 116% gains so far this year.
The stock still isn’t out of the woods yet, however. Many analysts believe the market as a whole is about to confront a more malicious crash, one that will likely see NVDA return at least some of its gains this year. In that regard, today’s uptick can be viewed as a sort of hiatus before the storm continues.
On the date of publication, Shrey Dua held LONG positions in NVDA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
