Nvidia (NASDAQ:NVDA) stock’s performance in 2025 is turning out to be quite a dud so far. With year-to-date losses of 20%, the shares are trailing both the broader markets (S&P 500 down 4.5%) and the SOX index’s rather heavy 12% loss.
The weakness can be attributed to a variety of headwinds, including concerns over growth, supply chain issues, and risks related to tariffs and regulations.
All these are noted by Bernstein’s Stacy Rasgon, an analyst who ranks in the top 3% of Wall Street stock pros, who also notes an interesting fact about the stock’s current situation.
“The stock trades at ~25x NTM earnings, their weakest level in a year and close to 10 year lows,” the 5-star analyst said. “In fact, the stock now trades below parity relative to the SOX (something we have seen only once or twice in the past decade; and at only a slight S&P premium, the lowest they have been since 2016).”
That valuation disconnect seems baffling to Rasgon, especially with a fresh product cycle underway. That said, Nvidia’s Blackwell launch hasn’t quite lived up to expectations, and market jitters over supply chain stability continue to stoke volatility. Still, Rasgon believes the company has largely worked through those issues.
In addition, post-earnings talks with Nvidia shed new light on Blackwell’s rollout—turns out, all $11 billion in FQ4 Blackwell revenue was shipped in January. That, Rasgon suggests, signals the “floodgates have opened.” Looking ahead, Nvidia insists demand will outstrip supply for several quarters, even as production ramps up. Meanwhile, customers are boosting capex, and instead of threatening AI momentum, DeepSeek appears to be driving even more momentum in the space.
One area that Rasgon does think warrants closer attention is that of rising regulatory risks, particularly with AI diffusion rules set to take effect in May and the potential for additional China bans.
However, that does not merit the depressed sentiment, with Rasgon believing the “worries that the AI trade is ‘over’ feel a little premature to us.” Furthermore, Nvidia’s valuation is becoming “increasingly attractive,” and if history is anything to go by, a big opportunity could be taking shape.
“We note that investors have historically done well to buy the stock at 25x or lower (with an average 150% next-year return with relatively limited downside,” Rasgon summed up, adding a little flourish in the end: “We could soon be so back…”
Rasgon’s confidence in NVDA translates into an Outperform (i.e. Buy) rating with a $185 price target – suggesting a 65% upside from here. (To watch Rasgon’s track record, click here)
There’s little resistance to that thesis amongst Rasgon’s colleagues. While 3 analysts remain on the sidelines, with an additional 37 Buys, the stock claims a Strong Buy consensus rating. The forecast calls for 12-month returns of 60%, considering the average price target stands at $178.66. (See NVDA 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.