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Nvidia Chip Demand Soars: 'Third Inning' of AI Boom
20 Nov
Summary
- Nvidia stock experienced a significant pullback before Q3 earnings.
- Analysts like Dan Ives remain bullish, citing strong Blackwell traction.
- Chip demand for Nvidia exceeds supply by a 12-to-1 ratio.
Nvidia's stock experienced a substantial pullback in the period leading up to its third-quarter earnings announcement. Options market activity indicates that traders view this recent downturn as a temporary phase, with some longer-dated contracts suggesting significant upside potential from current levels. This optimistic outlook is supported by an exceptionally high put-to-call ratio, signaling a leaning towards growth.
Analysts continue to express strong confidence in Nvidia's prospects. Wedbush's Dan Ives anticipates the company will surpass Street estimates for fiscal Q3, driven by the early success of its Blackwell platform. He emphasized that concerns about an AI bubble are premature, given the current demand-to-supply ratio of 12-to-1 for Nvidia's chips.
Further bolstering the positive sentiment, other Wall Street experts echo this bullish stance. Gene Munster of Deepwater noted that a rival chip capable of surpassing Nvidia is not expected for at least another six quarters. The consensus among analysts is a "Strong Buy" rating, with a mean target price indicating over 30% potential upside.
