Nvidia(NASDAQ: NVDA) stock may still be down from its June highs by about 20%, but it's gained meaningful ground in the last week. Monday's jump of as much as 6% brings its one-week return to about 10%.
The stock's decline and the latest jump both come from investors watching the same thing. When word came out that production of Nvidia's newest artificial intelligence (AI) chips could be delayed, some investors feared that the high-flying advanced chip company's shares would tank. But investors are now paying attention to several Wall Street analysts who have soothed those concerns.
Today, Bank of America's Vivek Arya released a report saying he thinks Nvidia's new Blackwell platform is "best suited for AI" and isn't sweating any short-term delivery delays.
Nvidia has the AI tools
Nvidia's Blackwell platform is supposed to begin shipping later this year, but a manufacturing delay could push that back several months, according to reports. But Arya noted in his report that the ongoing semiconductor "upcycle" is only one year into what has historically lasted more than twice that long.
He also believes that the adoption of AI chips is still in its early stages. That gives Nvidia a long runway to sell the Blackwell chip once deliveries begin. In the meantime, Nvidia will continue to sell its existing Hopper series chips fast through the end of this year, according to analysts at Jefferies.
The bottom line for Nvidia investors is that its products are in very high demand. That includes its current lineup as well as next-generation AI chips and related software. Analysts including Bank of America's Arya believe that both businesses and governments have big plans for AI adoption. That helps explain Nvidia's recent rebound and today's bounce. The next catalyst could come when the company reports its quarterly financial update on Aug. 28.
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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Howard Smith has positions in Nvidia. The Motley Fool has positions in and recommends Bank of America, Jefferies Financial Group, and Nvidia. The Motley Fool has a disclosure policy.
