Nvidia (NVDA), the leading maker of AI chips, remains one of Bank of America’s top picks in the semiconductor space. 5-star analyst Vivek Arya maintained his Buy rating on the stock with a price target of $275, suggesting 38% upside from current levels.
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Arya said investors are worrying too much about a slowdown in AI spending. In his view, this skepticism is actually a good thing. It shows that the market is cautious, not overly excited, and that leaves room for steady gains. He explained that recent weakness in AI chip stocks, including Nvidia, was driven by broader market issues, not by anything wrong with the AI story itself.
Why NVDA Stock Remains a ‘Top Pick’ for This Top Analyst
At Nvidia’s recent GPU Technology Conference, the company revealed about $500 billion in data center orders expected for 2025 and 2026. To Arya, this is a clear sign that AI infrastructure spending is still robust. He said Nvidia’s position at the center of that buildout makes it hard to match.
Arya believes Nvidia can grow its sales by 50% and earnings by 70% in 2026, driven by demand for its AI chips used in data centers and cloud systems. Despite that, he noted, the stock trades at only 24 times forward earnings, which he called a reasonable valuation for such growth.
Looking further out, Arya estimated that if global AI spending by 2030 reaches even half of Nvidia’s forecast — around $3–$4 trillion — the company could earn more than $40 a share. In that case, he said, the stock would be trading at less than 5x earnings, showing how conservatively it’s priced today.
China Risks Seen as Overstated
Some investors remain focused on risks tied to U.S. export restrictions on China. But Arya called that concern “unhelpful but irrelevant” to Nvidia’s near- and mid-term results. He said the company’s main growth engines, AI data centers, networking, and accelerated computing, remain on track.
While Arya acknowledged short-term challenges, such as uneven gaming sales or project delays in new data centers, he believes Nvidia’s long-term outlook is intact.
With a dominant market position and a growing order book, Nvidia remains, in his words, “one of the most compelling ways to invest in the AI revolution.”
Is NVDA Stock a Buy, Sell, or Hold?
Currently, Wall Street has a Strong Buy consensus rating on Nvidia stock based on 37 Buys, one Hold, and one Sell recommendation. The average NVDA stock price target of $237.21 indicates 19.17% upside potential.
