Nvidia has lost roughly a trillion dollars in market value in less than two months.
Although the semiconductor index has nearly doubled year to date, Nvidia is up only about 4%
For the company that makes most of the chips that power the AI revolution, that kind of lag has investors asking what is going on. Bank of America has an answer. On July 8, analyst Vivek Arya reiterated his buy rating and $350 price target on Nvidia and argued the stock is not underperforming because the business is struggling.
It is underperforming because investors are worried about the wrong things. Bank of America says Nvidia valuation at 7-year low Arya, ranked among the top 2% of Wall Street analysts on TipRanks with a 64% success rate and an average return of 32% per rating, made the valuation case plainly in his July 8 note. Nvidia is currently trading at its lowest forward earnings multiple in seven years, a level that Bloomberg noted takes the stock back to pre-AI boom valuation territory. “We strongly disagree with the EPS discount and see [it] as an enhanced buy opportunity for a unique, durable growth franchise,” Arya wrote.