Nvidia stock rallied back Friday after a tough Thursday when techs were battered. It occurred after former U.S. President Donald Trump reinstated tariffs on Canada and Mexico. Otherwise, Nvidia’s latest earnings update wasn’t ever seen as an outright win by investors counting on anything about artificial intelligence (AI).
Although the recent decline, some analysts believe that Nvidia could be a buy. The stock is even beginning to look like a value purchase.
Stock Performance and Market Impact
Nvidia shares on Friday gained 1.3% to $121.65, the S&P 500 rose 0.3%. This was a bounce back against Thursday, when Nvidia’s stock plummeted 8.5%. Nasdaq Composite sank 2.8% as well.
The main reason for Thursday’s selloff, was Trump’s decision to impose new tariffs. On March 4, U.S. will apply a 25% tariff to imports from Canada and Mexico, and 10% tariff to Chinese goods. Trump confirmed that decision on Truth Social, the social media platform run by his company, Trump Media.
Nvidia’s Long-Term Potential
Although Nvidia is experiencing some short-term woes, the analysts that cover the company are still upbeat about its prospects. The company’s new Blackwell chip is expected to boost a strong growth in 2007. However, Nvidia is facing a couple of challenges including:
The move to the new Blackwell chip – Investors fear short-term disruption as company moves to this next-generation item.
US chip sanctions against China – These trade restrictions may impact the revenue from Chinese customers for Nvidia.
Competition Chinese AI models – A Chinese AI model DeepSeek is reported to be developed at a much lower cost than the Western model, provoking concerns about upcoming competition.
Although these issues are raised, Bank of America analysts led by Vivek Arya still have Nvidia atop of their AI pick list. After the company announce its latest earnings report, they held onto a price target of $200.
Arya noted that some persons could have in mind expanding their collection diversification beyond artificial intelligence systems. However, he thinks they are severely underestimating the fast and the global rise of AI investment. He also mentioned that, at the moment, the stock price of Nvidia is at a relatively good valuation.
Is Nvidia Now a Value Stock?
Following Thursday’s decline, the valuation of Nvidia has slumped below the average company on the Nasdaq. This suggests the stock is a value story, even though the company has shown 55% year-over-year revenue growth, as Mizuho analyst Vijay Rakesh explains.
Right now, Nvidia is priced at 26 P/E and 0.7 points below the Nasdaq average at 27.1. This implies that investors underappreciate the company’s growth prospects.
Some investors were worried about Nvidia’s earnings report, but its earnings report was good enough to hold onto the positive momentum, UBS analyst Timothy Arcuri said. He noted that the company’s March conference, GTC, may offer more insight into what its AI strategy looks like.
What’s Next for Nvidia?
The Nvidia run yearly AI occasion GTC (Graphics Technology Conference) is scheduled for March 17-21 in San Jose, California. CEO Jensen Huang will deliver a keynote address March 18, which may include major news about Nvidia’s emerging AI efforts.
Thornburg Investment Management Elaine showing said CEO, perennial Nvidia lucky when a are gains jewel cuts when when run director basically Sun, portfolio manager Sean Sun is employed they cut solid Nvidia financials stay. What is even more important, the company is innovating continuously. Ahead of GTC, Sun hopes to see new product announcements to get investors interested.
Nvidia is Even Cheaper, Cheaper Than Walmart
Another interesting fact is that Nvidia’s stock is actually lower valued than Walmart’s.
Nvidia is currently trading at 26.5 priced earnings.
Walmart is on 36.5 times earnings.
Even with how big of a retail giant Walmart is, Nvidia is growing much faster. For value-seekers it makes Nvidia even more appealing.
Final Thoughts
Nvidia’s shares sank heavily after Trump’s tariff announcement and soft earnings report. But in the long run the story remains upbeat as there is stable investment and innovation in the AI area. The stock is cheap, at least by comparison to the rest of the tech sector and even some of the larger retail companies like Walmart.
For those who think AI’s long-term play is worth investing in, Nvidia’s recent sell-off could be a good buy opportunity.
