Why these analysts want you to ‘buy the dip’ in Nvidia

Concerns that the AI-driven rally in Nvidia stock may be losing steam appear “a little premature,” according to analysts at Bernstein, who maintain a positive outlook on the semiconductor giant.

After years of extraordinary gains, Nvidia’s stock has slowed in 2025, declining around 15% year-to-date.

The company has underperformed the broader semiconductor market, which saw a pullback of approximately 8.5%, and the S&P 500, which has lost 1% over the same period.

Nvidia shares tumbled more than 8% on Monday, now trading at roughly 25 times next-twelve-months (NTM) earnings—its lowest valuation in a year and approaching a decade-long low.

NVDA stock currently trades 2% higher, recovering from the losses seen in early trade.

Why Bernstein is bullish on Nvidia

Bernstein analysts, led by Stacy A. Rasgon, described this valuation shift as “a little stunning,” particularly as Nvidia enters a new product cycle.

They noted that the stock is now trading below parity relative to the Philadelphia Semiconductor Index (SOX), a rare occurrence over the past decade.

Additionally, Nvidia’s premium over the S&P 500 is at its lowest level since 2016.

The firm highlighted that Nvidia’s Blackwell chip revenues, totaling $11 billion, were all shipped in January, a sign that supply constraints are easing while demand is expected to surpass supply in the coming quarters.

Furthermore, capital expenditure data from Nvidia’s key customers continues to show an upward trend, suggesting continued investment in AI infrastructure.

Addressing investor concerns, Bernstein also noted that fears surrounding DeepSeek AI do not necessarily signal a collapse in AI-driven demand.

While regulatory risks persist, particularly with new AI export restrictions set to take effect in May and potential further bans on sales to China, Bernstein pointed out that China’s share of Nvidia’s revenue, despite reaching record levels, is at its lowest percentage in the past decade.

Bernstein reaffirmed its outperform rating on the NVDA stock with a price target of $185.

Citi analysts also see a buying opportunity

Citi analysts also reiterated their buy rating on NVDA stock, setting a price target of $163.00.

Despite the 13% drop in Nvidia’s stock following its recent earnings report, they believe the investment case remains intact.

Investor concerns have grown around macroeconomic challenges, including heightened US restrictions on AI exports to China and potential tariffs.

This has led to a reassessment of risks related to Nvidia’s broader market exposure, particularly in Singapore.

Singapore plays a key role in Nvidia’s financial operations, accounting for 18% of its projected total sales in fiscal year 2025 due to its function as a customer billing hub.

However, the company’s actual shipments to Singapore represent less than 2% of total sales, as outlined in its latest 10-K filing.

While the AI export restrictions and tariffs have introduced uncertainties about their potential impact on Nvidia’s gross margins, Citi analysts argue that the stock is now trading below historical valuation levels, offering an attractive risk-reward profile.

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