‘Buy In Ahead of Earnings,’ Says Top Analyst About Nvidia Stock
Nvidia (NASDAQ:NVDA) stock has been on a remarkable run, with its dominance in AI chipmaking playing a crucial role in its ascent to becoming the world’s second most valuable company. However, its red-hot rally has cooled recently, with the stock lagging the broader markets since the turn of the year.
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Evercore’s Mark Lipacis, an analyst ranked in the top 1% of Wall Street experts, attributes the downbeat sentiment to three main concerns: “1) DeepSeek lowers AI demand in aggregate, 2) DeepSeek shifts AI compute-cycles away from NVDA GPUs and to ASICs, 3) Blackwell delays.”
At first glance, these worries seem like valid headwinds, but Lipacis’ deep dive into the AI space tells a different story. After speaking with leading AI engineers at major hyperscalers, he found that DeepSeek’s cost efficiencies aren’t a game-changer – more of an evolution than a revolution. In fact, rather than hurting demand, cheaper compute costs could fuel even greater AI adoption, paving the way for more advanced, larger-scale, and multi-modal models that incorporate images and videos.
The fear of ASICs displacing Nvidia’s GPUs also appears overstated. While ASICs may find a niche in high-volume internal workloads, Nvidia’s dominance in external cloud and enterprise AI remains unshaken. Its unmatched software ecosystem and vast developer community keep it well ahead of rivals like AMD and AWS, reinforcing its stronghold in the AI chip space.
As for Blackwell, while its ramp-up may shift toward mid-2025 (from 1H25), demand for Nvidia GPUs remains strong. The H100 is expected to fill any short-term gaps until the B100 becomes available. That said, Lipacis highlights one tactical risk: if Blackwell faces significant delays, it could create a temporary “air pocket” in shipments. Longer term, the rise of custom AI chips poses a potential threat, but recent checks suggest that, at least in the near term, the risk is nominal.
These findings come ahead of Nvidia’s January quarter readout, slated for February 26, and what they suggest to Lipacis is that the stock represents an opportunity for investors.
“NVDA is trading at the bottom half of its 8-yr range of 20x-65x, as well as below its 8-yr median P/E of 36x,” the 5-star analyst noted. “We expect a positive report and outlook on its Jan-25Q earnings call.”
Lipacis’ advice, then, is to buy NVDA shares ahead of the print, with the analyst assigning an Outperform (i.e., Buy) rating for the shares along with a $190 price target. Investors could be pocketing gains of 43%, should Lipacis’ thesis play out as expected. (To watch Lipacis’ track record, click here)
The Street’s average target stands a little lower, yet at $178.84 it still factors in a one-year gain of ~35%. All told, based on a mix of 38 Buys vs. 3 Holds, the analyst consensus rates NVDA stock a Strong Buy. (See Nvidia stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.