Analysts are seeing a key opportunity for AI enthusiasts
By Samuel O’Brient, InvestorPlace Reporter
- Wall Street firms are as bullish as ever on Nvidia (NVDA) stock.
- Jefferies in particular thinks chip stocks are about to surge.
- The firm expects NVDA stock to lead the way in the next chip stock rally.
One Wall Street institution believes chip stocks are in for another massive rally. Analysts at Jefferies are offering coverage on multiple semiconductor producers, including Nvidia (NASDAQ:NVDA). While NVDA stock has recently been on a dip, Jefferies sees this as a key opportunity for investors before the next phase of the artificial intelligence (AI) boom.
Nvidia isn’t the only chip stock that the Wall Street bank expects big things from in the coming quarters. However, Street Insider reports that Nvidia boasts the title of being Jefferies’ “favorite” chip stock. This bodes well for NVDA as the Silicon Valley breakout sensation looks to maintain its dominance over the sector.
NVDA stock hasn’t fallen by too much, down only 0.5% in the last five days. What’s more, as investors already know, Nvidia hasn’t stayed down for long since the advent of ChatGPT and the AI gold rush. Therefore, any dip is likely an opportunity to double down on shares before they rise again.
What’s Happening With NVDA Stock?
NVDA stock started the day by falling. However, with positive sentiment from Wall Street and shares back up 1% as of this writing, Jefferies’ predictions are looking more and more correct. Indeed, analysts at the firm expect a “strong ramp for the GB200 NVL 36/72, which includes NVDA Arm based CPUs and more networking.” Analyst Blayne Curtis maintains a “buy” rating for Nvidia and a bullish price target of $1,200, implying upside potential of more than 30%.
It makes sense that enthusiasm for Nvidia would be climbing, as the company is getting ready to report first-quarter earnings. Many experts expect the May 22 report to send shares higher, including InvestorPlace’s Louis Navellier. Indeed, Navellier sees the report as a likely tailwind, even if Nvidia does not match previous blowout quarters.
Other Wall Street banks are even more bullish on NVDA stock. HSBC analyst Frank Lee has a $1,350 price target, implying upside potential of around 50%. Lee noted the following:
“We believe Nvidia will continue to demonstrate its strong pricing power via its NVL36/NVL72 server rack system and GB200 platform, which will once again surprise the market on the upside in [fiscal year 2026].”
On TipRanks, Nvidia holds a strong buy consensus rating based on 41 opinions. That breaks down to 39 buys, two holds and no sell ratings.
What Comes Next?
All eyes are on Nvidia as the company prepares for its Q1 report. Despite the recent dip, almost everyone seems optimistic that shares are destined to bounce back post-earnings. Jefferies also has good reason to be optimistic about the future of chip stocks, as demand is expected to keep rising. With demand for AI products and components still heating up, NVDA stock is poised to lead the charge higher.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Samuel O’Brient is a Reporter for InvestorPlace, where his work focuses primarily on financial markets, global economic trends, and public policy. O’Brient writes a weekly column on recent political news that investors should be following.