Nvidia (NVDA) Remains a ‘Top Pick’ at Bank of America After Earnings Beat

We recently published a list of 10 AI Stocks on Wall Street’s Radar. In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against other AI stocks on Wall Street’s radar.

One of the most notable analyst calls on Thursday, May 29, was for NVIDIA Corporation (NASDAQ:NVDA). Bank of America reiterated the stock as “Buy” and raised its price target on its top pick, Nvidia, to $180 per share from $160. NVIDIA specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services.

The rating follows Nvidia’s earnings on Wednesday. The company reported fiscal first-quarter earnings and revenue, beating analyst expectations. Its data center business led the way, with sales surging 73% year over year. Moreover, its current quarter revenue guidance was almost in line with analyst estimates at $45 billion, an outlook that could have been $8 billion higher if Nvidia didn’t face lost sales from the restriction on exporting its H20 chips to China.

A close-up of a colorful high-end graphics card being plugged in to a gaming computer.

The bank noted three major takeaways from the earnings call.

“Three major takeaways from the Q1 call: 1) China derisked, with $15bn in 1H sales of H20 product now already in the model, 2) Blackwell racks in full production, with every large hyperscaler now ramping close to 1K racks/week, 13K racks/quarter or ~$30bn+/q at $2.5mn+ rack ASP (or $100bn+ across the top few hyperscalers, though NVDA didn’t quantify further), and 3) NVDA confident in GM recovery back to mid-70s % sometime later in the year, another sign of improving demand and rack-scale execution.”

It further said that it is positive on the stock considering its transformation from a PC graphics chip vendor to a major supplier.

“Our positive view on Nvidia is based on its underappreciated transformation from a traditional PC graphics chip vendor, into a supplier into high-end gaming, enterprise graphics, cloud, accelerated computing and automotive markets.”

Overall, NVDA ranks 2nd on our list of AI stocks on Wall Street’s radar. While we acknowledge the potential of NVDA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than NVDA and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.