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Investors’ voracious appetite for all things Nvidia (NVDA) may have cooled slightly lately, but the cooldown is temporary and the feast itself has only just begun, according to a Wall Street semiconductor analyst.
“I think some of these [issues] they’re growing pains,” Bank of America analyst Vivek Arya told Yahoo Finance executive editor Brian Sozzi during an episode of Yahoo Finance’s Opening Bid podcast (video above, listen below).
Shares of the market darling and component Dow Jones Industrial Average have fallen 8.5% over the past month. The Dow Jones was down modestly last month, while the S&P 500 posted a 0.5% gain.
Arya added: “Look at any of these great and magnificent actions. “Each of them has periodically gone through this moment of soul-searching.”
That soul-searching of Nvidia stock, according to Arya, is related to several factors, including execution issues in trying to drive leading innovation and concerns about exposure to China ahead of President Trump’s potential tariffs.
“Some of them are company-specific forces,” Arya said of the problems, “and some of them are market forces.”
The switch to Nvidia’s touted Blackwell AI chip hasn’t been perfect, Arya explained, which has made bulls nervous.
“The last two quarters have not been clean because they are going through the growing pains of one generation of product to a new generation,” Arya said.
Read more: Why Nvidia’s Blackwell won Yahoo’s 2024 Financial Product of the Year award
Blackwell, which was unveiled in March at the company’s annual GPU conference, was hailed as Nvidia’s most powerful and innovative offering. But bringing the full idea in product form to the masses has proven more difficult.
“From [March]“What we have seen are execution problems that keep it out of the hands of customers,” he said.
Nvidia’s issues with skin and system level configurations may be resolved, but “we now have a two-quarter period where it’s very unlike Nvidia to have these question marks and where estimates have not increased as they were supposed to,” Arya said.
Still, Nvidia stock has plenty of long-term upside, Arya maintains. Wall Street would generally agree: Yahoo Finance data shows that 94% of sell-side analysts rate Nvidia stock as a Buy or Strong Buy.
All eyes remain on the company as it makes strides to launch Blackwell into a market eager for its offerings. Arya believes Blackwell will rack up billions in sales in 2025. The stock could also see a near-term catalyst when Nvidia founder and CEO Jensen Huang takes the stage as a keynote speaker at CES 2025.
