Nvidia has soared 170% year-to-date to become the largest company in the world this week, but the stock still represents an attractive investment opportunity — and any decline in the stock should be used as an opportunity to buy more.
That's according to Bank of America analyst Vivek Arya, who outlined in a note on Wednesday a handful of reasons investors should remain bullish on the chip maker that's powering the artificial intelligence boom.
"Nvidia stock's steep climb, up 50% just in CQ2 (vs. SPX up 4.4%) could make it vulnerable to near-term profit taking," Arya said. "But we argue any volatility likely to be short-lived."
These are the five reasons Arya is staying bullish on the stock.
"On-premise enterprise/sovereign AI demand plus software monetization in early stages," Arya said.
"We believe recurring software services could open the next leg of growth, while strengthening its direct relationship over enterprise users," Arya said.
Nvidia's potential to build a significant recurring revenue stream from its CUDA software offering is what drove Rosenblatt to raise its Nvidia price target to a street-high $200 per share on Tuesday.
Arya reiterated his "Buy" rating on Nvidia stock and $150 price target, representing upside of 12% from current levels.