Nvidia Still A Top Pick As Microsoft, Meta Stick With GPUs Despite DeepSeek Challenge: Analyst

Group 1: Analyst Ratings and Expectations - BofA Securities analyst Vivek Arya maintained a Buy rating on Nvidia Corp NVDA with a price target of $190, considering it a top pick ahead of the fourth-quarter earnings call scheduled for February 26 [1] - Arya expects a modest beat in earnings, inline sales guidance, and lower gross margin in the first quarter due to the Blackwell product transition and China restrictions [1] - The earnings call could mark a trough in investor sentiment, with expectations for Nvidia to reassure on Blackwell execution and signal confidence around fiscal 2026 and calendar 2025, projecting over 60% growth in data center sales [1] Group 2: Market Position and Financial Metrics - Nvidia stock is trading at approximately 26 times calendar 2025E PE, which is at the lower end of the range of 25-59 times, with a median of 39 times NTM PE [2] - Nvidia is the leading platform for computing, driven by frontier-model training and AI inference, with compute requirements growing 3-5 times due to newer models [3] - The total addressable market (TAM) for Nvidia is projected to grow to around $500 billion by calendar 2028 and 2029, which is 5 times and 2.5 times compared to calendar 2024 and 2025 [4] Group 3: Demand and Competitive Landscape - Arya expects rising demand from Western markets to offset challenges from China, with a focus on AI compute/networking demand [5] - Nvidia's consistent co-optimization of hardware and software, along with its large enterprise moat, presents challenges for ASIC vendors to overtake [6] - For the fourth quarter, Arya projected Nvidia's revenue at $38.7 billion and adjusted EPS at $0.86 [6]