Nvidia stock (NVDA) led gains among the “Magnificent Seven” tech stocks to kick off the new year after a group-wide selloff in the final days of 2024. The AI chip maker's shares rose 3.5% on Friday morning after gaining about 3% the previous day .
That rise followed a 4% decline between Christmas Day and New Year's Eve as a tech megacap stocks fell across the board in the absence of a “Santa Claus” rally, where the stock market typically enjoys a surge between December 24 and January 2. Tesla (TSLA) shares are down nearly 13% in that time frame, while Amazon (AMZN) and Microsoft (MSFT) fell by more than 4%. Meanwhile Meta (META) and Google (GOOG) fell just below 4%, as did Apple (AAPL) fell by 3%.
Despite December's decline, Nvidia shares ended 2024 up more than 150%. Wall Street analysts do stocks remained bullishthe stock is estimated to rise to about $173 over the next year from a current level of $138, according to Yahoo Finance data.
Bank of America's Vivek Arya told Brian Sozzi of the Opening Offer podcast Thursday, as broader market forces and company-specific issues led to a selloff in Nvidia shares late last year.
“What we've seen in the market is a rotation of money from semiconductors to software,” Arya said, noting that the latter was less exposed to US trade restrictions on goods to and from China. He added that for Nvidia, “the last two quarters haven't been clean, really, because they've been going through growing issues from one generation of the product, which was the Hopper, to the next generation of the product.”
Arya was referring to the concerns around shipment delays of Blackwell's new artificial intelligence chips.
“In our view, these are short-term issues,” he said. That could create a buying opportunity: While its Magnificent Seven peers are trading at double the estimated average earnings growth for 2025, Arya noted that Nvidia stock is trading at less than one times the company's consensus earnings growth this coming year.
Arya has a Buy rating on Nvidia stock and sees the stock rising to $190 over the next 12 months.
Shares of Nvidia and its Magnificent Seven peers benefited from investors' massive bets on artificial intelligence as well as earnings growth. As This was reported by Josh Schafer of Yahoo FinanceApple, Alphabet, Microsoft, Amazon, Meta, Tesla and Nvidia combined reported a 33% year-over-year increase in earnings in 2024, compared with just 4.2% growth for the other 493 companies in the S&P 500, according to FactSet data. .
