After the biggest plunge in over four years, analysts are calling for bottom fishing in NVIDIA: the demand outlook is promising
After the sharp drop in NVIDIA's stock price, analysts believe that the demand outlook is positive. NVIDIA has visibility on orders from hyperscale cloud providers and tier-2 cloud providers until October. The upcoming Blackwell series is expected to drive double-digit growth by the end of this year and throughout 2025. The stock prices of AMD and Dell Technologies have also been affected, but analysts believe that NVIDIA's supply and demand situation is relatively balanced, so investors need not worry. The demand outlook for NVIDIA is promising
NVIDIA's stock price plummeted last Friday, sparking a heated debate in the market - has the AI frenzy led by NVIDIA come to an end? While there is no shortage of pessimistic voices in the market, many analysts believe that it is a good opportunity to buy on dips.
Ben Reitzes, an analyst at Melius Research, stated that the visibility of demand for NVIDIA until October is good, and later this year, the potential of its Blackwell series is enormous.
Last Friday, AMD broke the tradition of providing preliminary performance results, causing investor panic. Chip stocks and AI concept stocks plummeted across the board, with NVIDIA plunging 10% on the day, marking the largest single-day decline since the outbreak of the COVID-19 pandemic in early 2020, with its market value falling to $1.9 trillion, hitting a two-month low.
In his latest report, Reitzes pointed out that AMD's failure to release positive performance expectations in advance has raised concerns among investors. Due to increased supply or some customers waiting for the Blackwell series, the supply and demand situation for NVIDIA's H100 is more balanced, no longer as tight as before.
However, Reitzes believes that investors should not worry about NVIDIA's demand outlook. NVIDIA has visibility on orders from hyperscale cloud providers and tier-2 cloud providers, with related demand visible until October. Concerned about Wall Street's upside potential for NVIDIA, Reitzes believes that the upcoming Blackwell series is expected to drive double-digit growth at the end of this year and throughout 2025.
Reitzes also "defended" Dell Technologies. Like AMD, Dell is also engaged in server-related businesses, and the stock prices of both companies have experienced explosive growth due to AI demand. Dell's stock price fell nearly 3% in last Friday's storm.
Reitzes expects AMD's revenue in the first quarter to grow by 9% compared to the previous quarter, while Dell's server department revenue is expected to decline by 5% from the previous quarter. However, surveys show that Dell is gaining market share in the AI server market and has recently won some large AI orders, which is a better situation.
On Monday, NVIDIA rose by 5% intraday, briefly regaining the $800 mark.
