Investing.com — Bank of America reiterated its Buy rating on Nvidia (NASDAQ:), maintaining a $165 price target on the stock, citing “compelling growth in [a] convincing appreciation.”
Despite near-term challenges, BofA analysts see these hurdles creating an attractive buying opportunity.
Nvidia faces several near-term headwinds, including delays in its Blackwell product line, regulatory scrutiny from a potential DOJ antitrust investigation and market challenges such as weak seasonality and interest rate concerns, the bank said.
However, BofA emphasizes that these challenges could actually increase the stock’s buying potential.
The stock is currently trading at a price-to-earnings (P/E) ratio of around 27x forward CY25 price-to-earnings ratio, which BofA says is in the lowest quartile of its five-year range, making it particularly attractive at this level.
Regarding the DOJ investigation, BofA notes that Nvidia’s AI chips are in high demand, and even with delays at Blackwell, the company expects consistent growth thanks to the power of the previous generation of Hopper chips.
BofA also emphasizes that Nvidia’s products have “consistently exceeded industry benchmarks,” making it unlikely that Nvidia’s dominance in AI will significantly decline.
BofA is optimistic about Nvidia’s AI prospects, especially with upcoming next-gen major language models (LLMs) such as OpenAI’s GPT-5 and Meta (NASDAQ:)’s Llama 4.
These new models, built on Nvidia’s chips, are expected to bring advances in reasoning, reliability and autonomy.
“AI capex not only drives new business opportunities, it is also critical in protecting existing moats and large profit pools in search, social and enterprise (chat, co-pilot) workloads,” BofA adds.
BofA considers Nvidia a top pick in the technology sector. “The key fundamental recovery catalyst in the coming weeks will likely be supply chain data points confirming the readiness of new Blackwell product deliveries,” they conclude.