Markets started the week with investors all around the globe running for cover. In any sell-off, some of the hardest-hit stocks are growth stocks that had run up the most. That includes advanced chip maker Nvidia (NASDAQ: NVDA).
Even with the market bouncing back some this week, the high-flying stock is now down about 25% from its record closing price in mid-June. But one Wall Street analyst thinks the plunge in Nvidia shares creates a great opportunity for investors.
Oppenheimer analyst Rick Schafer just released his latest research note saying investors could gain about 50% from Nvidia stock if he's right about the stock reaching $150 per share.
Selling on Nvidia rumors
The selling of Nvidia stock was exacerbated after rumors circulated over the weekend that a defect discovered in its next-generation Blackwell chip will cause a delay in its rollout later this year. That chip and its architecture are expected to be very popular among customers looking to get the highest computing power available for artificial intelligence (AI) plans.
But Oppenheimer's Schafer thinks there's no need for investor concern even if those rumors are true. That's because any delay rolling out Blackwell will be used to help supply the excessive demand for Nvidia's existing H100 AI chips.
In his research note, Schafer wrote, "Nvidia's competitive position remains sound, and we don't expect any share loss from a minor delay. ... We see Nvidia as best positioned in AI, benefiting from full stack AI hardware/software solutions."
Schafer's comments make complete sense. All signs point to a big gap between Nvidia's current chip capacity and surging demand. While competitors will help fill some of that gap, Nvidia should be happy to continue to sell its existing chips. Blackwell will just boost those sales even further. That makes the correction in Nvidia stock an opportunity to buy.
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Howard Smith has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
