Nvidia, a leading artificial intelligence (AI) technology firm, has seen its stock price decline by 17% in recent days amid concerns about tariffs and valuations. However, Bernstein analyst Stacy Rasgon believes the current market conditions present a buying opportunity for investors.
According to Rasgon, Nvidia’s valuation is at its lowest level in over a decade, trading at around 25 times estimated earnings for the next 12 months. This is considered attractive by Rasgon, who notes that past research has shown investors can achieve an average return of 150% when buying Nvidia at this price level.
Rasgon attributes the decline in sentiment towards the AI trade to increased scrutiny on supply chain issues, particularly the impact of the Blackwell introduction. However, she believes the company has worked through these challenges and is poised for growth.
A key concern for Bernstein is the potential impact of President Donald Trump’s export restrictions on China. Rasgon warns that stricter controls could lead to a reduction in earnings by mid-to-high single digits, which would negatively affect the stock price.
The recent decline in Nvidia’s stock has raised questions about demand for AI applications and projects. Microsoft’s decision to slash data center leases and walk away from ambitious expansion plans has sparked concerns about the growth of generative AI.
Despite these challenges, Rasgon remains bullish on Nvidia, with an outperform rating and a $185 per share price target. The analyst believes that the company’s GPU Technology Conference (GTC) in a few weeks will provide further insight into its prospects.
Source: https://www.cnbc.com/2025/03/04/cheap-nvidia-valuation-nearing-10-year-lows-according-to-bernstein-.html