Nvidia (NASDAQ: NVDA) stock is well off its highs at the moment. Currently, it can be snapped up for $118, about 23% below its all-time high of $153. Is there a major opportunity to consider here? One major Wall Street analyst seems to think so.
A ‘generational’ opportunity
The analyst I’m referring to is Dan Ives from Wedbush Securities. A regular CNBC contributor (known for his colourful attire), Ives is one of the best-known tech analysts on Wall Street.
Last week, he told CNBC that he believes Nvidia is currently offering a ‘generational opportunity’ for investors. He believes a whopping $2trn will be spent on the artificial intelligence (AI) buildout in the next three years. And he sees Nvidia – which designs AI chips – as the primary beneficiary. “We’re going to be talking about Nvidia at $4trn, $5trn over the coming years,” he said. For context, the company has a market cap of $2.9trn today.
In 25 years doing this, I can count the times that have been almost generational opportunities relative to what the stock’s doing. That’s where I think Nvidia is here.
Wedbush Securities tech analyst Dan Ives
My view
Do I agree with Ives? I’m not sure, to be honest.
On one hand, I remain very bullish on the AI theme. I think this technology is here to stay and I expect Nvidia to benefit from the growth of the industry in the years ahead.
Meanwhile, I think Nvidia stock trades at an attractive valuation today. Currently, the price-to-earnings (P/E) ratio here is only 26. This is not high given that the company’s earnings are forecast to jump 53% this year. The price-to-earnings-to-growth (PEG) ratio is just 0.5.
On the other hand, I do think there’s a possibility that near-term AI spending could be lower than anticipated (which could result in lower-than-expected revenues for Nvidia). Since the arrival of low-cost AI model Deepseek a few months ago, I’ve been a little less bullish on the AI buildout theme than I was previously.
I also think there’s a chance that Nvidia’s share price could go lower before it goes higher. I wouldn’t be surprised to see the stock hit $100 again given all the chaos in the market right now (due to tariffs) and the negative sentiment towards tech stocks.
How I’m playing Nvidia
As for how I’m playing Nvidia myself, I am invested in the company. Currently, it’s one of my largest holdings.
However, I recently sold a few shares near the $140 mark. This was mainly to reduce risk in my portfolio.
I’m not in a rush to buy the shares back at $118 given the size of my holding. But if the stock was to fall to $100 or below, I could be tempted to start adding to my position again.
That’s where I’d be looking to buy. And that’s where I think investors should be considering the stock if they don’t yet own it.
