Bernstein Reiterates Outperform on NVIDIA, $185 Price Target

Bernstein SocGen Group analyst Stacy Rasgon reiterated an Outperform rating and $185 price target on NVIDIA (NASDAQ: NVDA).

“It’s been a rough year for NVDA so far…The stock (along with many of its AI-semi peers) has suffered, battered by a storm of growth fears, supply chain noise, and tariff and regulatory risks.

And after several stellar years of returns the stock has taken a breather, down 15% so far YTD, underperforming an overall weaker semi market (with the SOX down ~8%) and the S&P down ~1%.

But valuations are now at trough levels… After yesterday’s rout the stock trades at ~25x NTM earnings, their weakest level in a year and close to 10 year lows.

In fact, the stock now trades BELOW parity relative to the SOX (something we have seen only once or twice in the past decade) and at only a slight S&P premium , the lowest they have been since 2016.

Nevertheless, worries that the AI trade is “over” feel a little premature to us, and valuation is getting increasingly attractive. Sentiment has clearly pivoted for now on the AI group.

However, spending intentions seemingly continue to rise, a product cycle is just kicking off, and we have GTC coming in a few weeks.

And we note that investors have historically done well to buy the stock at 25x or lower (with an average 150% nextyear return with relatively limited downside; Exhibit 11), hence valuation is looking increasingly attractive.

We could soon be so back…We rate NVDA Outperform, $185 PT.”

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