Shares of semiconductor giant Nvidia ($NVDA) have been volatile amid broader market swings as investors weigh the sustainability of AI demand and the company’s premium valuation. NVDA gained more than 4% on July 10 as investors looked past escalating Middle East tensions. However, the stock is trading lower in Monday’s pre-market session after fresh U.S. and Iranian airstrikes over the weekend heightened geopolitical risks. Despite the recent pullback, analysts remain optimistic that strong AI infrastructure spending could drive further gains for Nvidia shares.
Investors also brushed aside concerns that Meta’s ($META) push to develop more of its own AI chips could reduce its reliance on Nvidia. They believe that surging AI infrastructure spending by hyperscalers will continue to drive strong demand for Nvidia’s GPUs (graphics processing units).
Investors are also watching comments from Taiwan central bank governor Yang Chin-long, who warned that if tech companies keep borrowing heavily to fund AI projects, it could eventually create a market bubble that may not be sustainable. The remarks drew attention because Taiwan is home to Nvidia’s primary chip manufacturing partner, Taiwan Semiconductor Manufacturing ($TSM). Taiwan is a key part of the global AI chip supply chain. The warning raised broader concerns about whether the rapid pace of AI investment can be sustained over the long term.
Wall Street Calls Nvidia a ‘Top Pick’
Following news of Meta’s custom AI chip plans, Benchmark analyst Cody Acree said Nvidia could lose some of its share of Meta’s AI chip spending as Meta builds more of its own chips. However, because big tech companies are expected to more than double their overall AI spending, Nvidia is still likely to see strong growth in sales. Acree has a Buy rating on NVDA with a price target of $335, which implies 58.8% upside potential from current levels.
Similarly, Citi analyst Atif Malik reiterated his Buy rating and $300 price target, implying 42.2% upside potential. He called Nvidia the firm’s “top buy-rated mega-cap data center semiconductor stock,” backed by strong access to DRAM despite tight industry supply. Moreover, Nvidia’s management reaffirmed that AI demand remains strong, its next-generation chip roadmap is on track, and more businesses, governments, and AI startups are adopting its technology.
Is Nvidia a Good Stock to Buy?
On TipRanks, NVDA has a Strong Buy consensus rating based on 36 Buys and one Hold rating. The average Nvidia price target of $309.33 implies 46.6% upside potential from current levels. Year-to-date, NVDA shares have gained 13.3%.
