Financial institution of America retains Nvidia inventory as High Decide heading into CES subsequent week

Investing.com — Financial institution of America analysts on Wednesday reiterated Nvidia (NASDAQ:NVDA) inventory as their high decide forward of the Client Electronics Present (CES) on January 6. Nvidia CEO Jensen Huang is about to ship his keynote throughout the occasion.

“Whereas the massive themes have already been talked about within the media forward of the occasion, we nonetheless see CES as a optimistic catalyst, re-asserting NVDA’s platform dominance/alternative in high-growth markets,” BofA analysts led by Vivek Arya stated within the notice.

Analysts are significantly occupied with a number of potential updates from Nvidia at CES. These embody the corporate’s robotics technique involving the Jetson Thor platform, the launch of the RTX 50xx, Blackwell variants for PC gaming playing cards, a potential enterprise into the AI PC market by means of a partnership or a standalone PC CPU, and updates on information heart know-how, together with present and next-generation merchandise.

Nvidia’s projected 50%+ year-over-year gross sales development within the calendar 12 months 2025 might place it because the quickest grower within the S&P 500 index, BofA notes, citing present consensus estimates.

The agency additionally sees a possible continuation of over 20% gross sales development into the next 12 months, as Nvidia expands its attain into enterprise and sovereign deployments. Regardless of a buying and selling price-earnings (PE) ratio above the S&P 500 common, BofA considers Nvidia’s inventory to be attractively priced, particularly given its development prospects.

“Traditionally NVDA inventory has traded between 25x-35x ahead PE vary, and therefore at the moment at 30x is attractively buying and selling throughout the center of its valuation vary, in our opinion,” analysts stated.

The push into robotics is seen as a big transfer for Nvidia, leveraging its complete capabilities from silicon to software program. Nevertheless, BofA acknowledges the challenges in creating dependable, reasonably priced, and widespread robotics merchandise that may generate credible enterprise fashions.

“From that perspective robotics might stay one other cool however area of interest alternative resembling metaverse or autonomous vehicles,” analysts wrote. “So, whereas we don’t doubt NVDA’s capabilities, we’re uncertain as to when and how briskly they will affect NVDA’s financials.”

Lastly, analysts anticipate CES to offer reassuring updates on Nvidia’s Blackwell shipments and the next-gen variants optimized for AI inference, in addition to a possible accelerated timeline for the Rubin undertaking. These updates are seen as essential for Nvidia to deal with market issues and company-specific points which have affected its inventory efficiency over the previous six months.