Nvidia Stock is Still a ‘Top Pick’ as Supply Chain Uncertainty Rages On, Says Analyst

As investors continue to parse through the latest headlines around the Trump administration’s tariff strategy, Nvidia (NVDA) is one of many Big Tech titans to experience significant volatility on the charts. After printing as low as $86.62 last week, NVDA stock settled Monday’s session at $110.71, and is currently down by 17% on a year-to-date basis. The artificial intelligence (AI)-focused fabless semiconductor designer received a notable boost when chips were specifically exempted from the latest round of tariffs.

Plus, in a strategic move to address both political pressures and growing demand, Nvidia has announced plans to manufacture $500 billion worth of AI infrastructure in the U.S. over the next four years. The expansion includes new manufacturing facilities in Arizona, where AI semiconductors will be produced, and Texas, where supercomputers will be assembled by 2026. 

Redburn Atlantic is Bullish on NVDA Stock

Now, in a note this morning, Redburn Atlantic says NVDA is still a “top pick” in the chip industry. Analyst Timm Schulze-Melander acknowledged broader uncertainty plaguing the group, but argued that “leading-edge AI and chipmaking investment will prove to be more resilient” - which includes NVDA, a stock he rates “Buy.”

“We expect strategically important data center modernization to be among the last areas to be cut – providing resilience compared with the broader cycle," continued the Redburn analyst, who set a price target of $178 for NVDA. That compares to an average price target of $173.95 on Wall Street, where Nvidia has garnered a consensus “Strong Buy” from the 43 analysts in coverage.

Should You Buy NVDA Stock Now?

The company's core AI GPU business remains robust, driven by high demand for its new Blackwell architecture, which offers up to 50x better performance than previous generations for AI inference tasks. 

Despite strong fundamentals, including projected earnings growth of 47.49% and revenue growth of 52.14% for the year, NVDA faces some challenges. Internal competition from its largest customers developing their own AI chips and margin pressure from accelerated product replacement cycles pose potential headwinds. 

However, trading at a forward adjusted price/earnings (P/E) ratio of 24.45 - comfortably below its historical average of 47.70 - many analysts view the recent pullback as an attractive entry point for long-term investors. Nvidia also maintains its dominant position with a 95% share in the AI chip market, and management projects that data center spending could reach $1 trillion annually by 2028. 

The combination of semiconductor tariff exemptions, ambitious domestic manufacturing expansion plans, and compelling valuation suggests positive long-term prospects for NVDA. That said, investors should note that short-term volatility may persist due to ongoing geopolitical tensions affecting chip stocks and the broader tech sector.

This article was generated with the support of AI and reviewed by an editor. On the date of publication, the editor had a position in: NVDA . All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.