Nvidia (NASDAQ: NVDA) stocks continue to run incredible ways, with the advantage of AI chipmaking playing a key role in rising to become the second most valuable company in the world. However, its Red Hot Rally has been cooled recently, and stocks have fallen behind the wider market since the turn of the year.
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Mark Lipathys of Evercore, an analyst ranked in the top 1% of Wall Street experts, attributes downbeat emotions to three main concerns: “1) Deep Sec lowers the total AI demand ASICS, 3) Blackwell’s delay.”
At first glance, these worries seem like effective headwinds, but Lipathys’ deep dive into AI space tells a different story. After talking to leading AI engineers in key hyperschools, he discovered that Deepseek’s cost-effectiveness is not a game-changer. In fact, rather than hurting demand, cheaper computational costs could further promote AI adoption, paving the way for more sophisticated, larger, multimodal models with images and videos incorporating them. You can do it.
The fear of ASIC replacing Nvidia’s GPU also appears to be exaggerated. While ASICs may find niches in large numbers of internal workloads, Nvidia’s advantage in external clouds and enterprise AI remains unshakable. Its unparalleled software ecosystem and vast developer community are pushing ahead of rivals like AMD and AWS to enhance its AI chip space hub.
As for Blackwell, its ramp-up could shift to mid-2025 (from 1H25), but demand for Nvidia GPUs remains strong. The H100 is expected to fill the short-term gap until the B100 is available. That said, Lipacis highlights one tactical risk. If Blackwell is facing serious delays, it could create a temporary “air pocket” at the time of shipment. In the long run, rising custom AI chips pose a potential threat, but recent checks suggest that risk is nominal, at least in the short term.
These findings ahead of Nvidia’s January quarter reads scheduled for February 26th, and what is suggested by Lipacis is that the stock represents an opportunity for investors.
“NVDA is trading in the lower half of the 20X-65X 8-year range, below the 36X 8-year median P/E,” said the five-star analyst. “We are looking forward to positive reporting and outlook on revenue calls for January 25th Q.”
Lipacis’ advice is to buy NVDA shares before printing. Analysts assign stock outperform (i.e., buy) ratings along with a price target of $190. If the Lipacis paper occurs as expected, investors may have pocketed 43% profits. (Click here to see Lipacis achievements)
The average street target is a bit lower, but at $178.84, it is still considered with a profit of ~35% over the year. Based on the 38 Buys vs. 3 Holds combination, analyst consensus rate NVDA stocks have a strong shopping experience. (See Nvidia stock forecast)
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Disclaimer: The opinions expressed in this article are the opinions of featured analysts. Content is intended for informational purposes only. It is very important to do your own analysis before making an investment.
