March 4 - Bernstein analysts contend that worries over the end of the AI trade are a little premature, maintaining a positive outlook on Nvidia Corporation (NVDA, Financial). In a note, they highlighted that while Nvidia's shares have retreated about 15% year-to-date, the chip giant remains poised for growth amid a new product cycle.
The report noted that Nvidia now trades at roughly 25 times next twelve months earnings, its weakest multiple in a year and near a decade low. Analysts led by Stacy A. Rasgon added that the stock is trading below parity relative to the semiconductor index (SOX) and only at a slight premium over the S&P 500 levels last seen in 2016.
Bernstein pointed to Nvidia's Blackwell product revenues of $11 billion, all shipped in January, as an indicator that supply constraints are easing. They also observed that rising capital expenditure among customers signals robust future demand.
Despite regulatory risks, including new AI diffusion rules set for May and potential bans in China, Bernstein remains cautiously optimistic. They stressed that the current de-rating comes at the start of a new product cycle, suggesting that the underlying fundamentals for Nvidia continue to support long-term growth.
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