Nvidia (NASDAQ:NVDA) begins 2025 as the top AI chipmaker with its position among the world’s most valuable companies firmly secured.
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And right out of the gate, there could be a catalyst on the way. Tech show CES 2025 kicks off this week (between January 7-10) with the keynote on January 6 featuring Nvidia CEO Jensen Huang.
Looking forward to the event, Bank of America’s Vivek Arya, an analyst who ranks in the top 2% of Wall Street stock pros, thinks there will be enough for investors to get excited about.
“While the big themes have already been mentioned in the media ahead of the event, we still see CES as a positive catalyst, re-asserting NVDA’s platform dominance/opportunity in high-growth markets,” the 5-star analyst opined.
Among the key opportunities is Nvidia’s foray into robotics. By capitalizing on its overall expertise (from silicon to software), Arya sees Nvidia making a “strong push” into robotics. That makes sense as extending AI applications from computing and tools like chatbots and co-pilots to the physical domain of sensors and robots looks like a logical progression. The challenge, however, will be to make the products “reliable enough, cheap enough and pervasive enough to spawn credible business models.”
That said, there is the possibility that similar to the metaverse or autonomous vehicles, robotics could remain “another cool but niche opportunity.” “So,” Arya goes on to add, “while we don’t doubt NVDA’s capabilities, we are unsure as to when and how fast they can influence NVDA’s financials.”
Meanwhile, although Nvidia has been the poster boy for AI, over the past 6 months the stock’s rally has stagnated as a range of issues have come to the fore. These have included an overall shift from semis to software, and issues related to China restrictions, as well as company-specific challenges like a Blackwell design flaw, a slower rollout of high-density (NVL 72) racks, and declining gross margins (dropping from mid-70s to lower levels). Arya thinks CES will provide the company with an opportunity to offer reassuring updates on: “1) Blackwell shipments, 2) next-gen variants (GB300, optimized for newer versions of AI inference) and 3) potential timeline acceleration for Rubin which could help NVDA regain control of the (overstated) narrative around custom-chips from cloud vendors overtaking/reducing need to buy NVDA’s merchant silicon.”
Bottom line, ahead of the event, Arya rates Nvidia shares a Buy, while his $190 price objective suggests the stock will gain ~32% over the coming months. He also names Nvidia a “sector top pick.” (To watch Arya’s track record, click here)
The broader analyst consensus echoes Arya’s optimism. Of the 40 analysts covering the stock, 37 recommend a Buy, while just 3 suggest a Hold (Neutral) rating. This strong endorsement results in a Strong Buy consensus, accompanied by an average price target of $177.08, implying a potential 22.5% upside over the next 12 months. (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.
