Bank
of
America
warned
against
seeing
Nvidia
as
a
potential
long-term
pullback
victim
while
cautioning
that
today’s
artificial
intelligence
boom
is
altogether
different
from
the
1990s
dot-com
bubble.
“Unlike
the
‘dot-com
boom’
that
was
funded
by
risky
debt-taking,
genAI
deployment
is
a
mission-
critical
race
between
some
of
the
best-funded
(cloud)
customers,”
analyst
Vivek
Arya
wrote
to
clients
on
Wednesday.
Arya
maintained
his
buy
rating
and
top
pick
designation
on
the
maker
of
AI
processors,
viewed
as
the
biggest
winner
of
the
AI
mania
that’s
consumed
investors
since
late
2022.
His
$150
price
target
implies
another
15%
upside
over
the
next
12
months
versus
the
price
at
which
Nvidia
was
trading
midday
Thursday,
building
on
this
year’s
gain
of
165%
and
last
year’s
239%
advance.
Arya
said
Nvidia’s
vertical
rally
in
the
second
quarter
—
up
45%
since
March
31
—
compared
with
the
broader
market
—the
S
&
P
500
is
up
4%
—
could
make
Jensen
Huang’s
company
vulnerable
to
short-term
profit-taking.
Nvidia
briefly
rallied
3.8%
on
Thursday,
helping
send
the
S
&
P
500
above
5,500
for
the
first
time,
only
to
later
retreat
as
much
as
3.8%.
But
Arya
said
any
volatility
should
be
short-lived.
Beyond
the
AI
spending
being
considered
legit,
he
noted
that
hardware
deployments
in
the
space
are
only
in
the
second
of
what
could
be
a
three-
to
five-year
development
cycle.
That
could
amount
to
an
eventual
$300
billion-a-year
opportunity,
about
three
times
the
current
rate.
Additionally,
Arya
pointed
to
demand
among
cloud
customers
for
Nvidia’s
new
Blackwell
AI
accelerator
systems.
The
analyst
said
on-premise
enterprise
and
sovereign
AI
demand
as
well
as
software
monetization
is
still
in
the
“early
stages.”
NVDA
YTD
mountain
Nvidia,
year
to
date
“I
think
it
has
the
power
to
transform
a
lot
of
industries
in
ways
we
have
just
not
seen
before,”
Arya
said
of
generative
AI
on
CNBC’s
“Squawk
Box”
Thursday
morning.
“AI
is
giving
us
that
next
opportunity
to
upgrade
the
infrastructure
using
this
new
form
of
accelerated
computing.
So,
I
do
think
it’s
…
structurally
a
new
tool.”
When
all
is
said
and
done,
Arya
said
that
Nvidia’s
valuation
is
still
“compelling.”
He
said
it
sells
for
just
35
to
40
times
the
consensus
and
has
a
price-earnings
multiple
of
just
around
30
times
when
considering
the
bull
case
for
earnings
per
share.
