Nvidia pause ‘refreshing,’ ‘don’t sweat’ competitive noise, says BofA

BofA notes Nvidia (NVDA) shares are down about 11% from the all-time high of $950 hit on March 25 following the company’s GTC tradeshow, pointing out that the current selloff marks the ninth time Nvidia’s stock has declined about 10% or more since ChatGPT was launched in late 2022. While noting there are some market factors – such as the recent rise in inflation, volatility, AI stock fatigue, rotation towards more cyclical sectors and possibly some pruning ahead of upcoming earnings season – the firm said that on a fundamental basis it has also heard of investor concern around rising competition, including yesterday’s announcements from Google (GOOGL) and Intel (INTC) and reducing lead-times that suggest decelerating demand. However, BofA advises investors “don’t sweat competitive and Asia supply chain noise” as it believes the fundamentals are solidly on track and periods of consolidation “tend to set the stock up for strong moves later.” BofA maintains a Buy rating and $1,100 price target on “top pick” Nvidia.