Nvidia (NVDA, Financial) remains a top sector pick after Bank of America's Vivek Arya returned from investor events in San Francisco with “very positive” feedback on AI demand, reaffirming his Buy rating and maintaining a $180 price target.
Arya noted that Nvidia's Blackwell rack-scale systems now account for about 70% of compute sales, with Blackwell Ultra production slated to begin in Q2 alongside Rubin and Feynman on track, underscoring seamless generational transitions and limited ramp costs.
He highlighted that the recent lifting of AI Diffusion export rules opens a “sovereign AI” growth vector—sovereign governments and CSPs are expected to build their own foundational models, expanding Nvidia's addressable market beyond hyperscalers.
Addressing China-related risks, Arya emphasized that Nvidia considers its China AI exposure “fully de-risked” after H20 export restrictions, meaning any future sales into the $50 billion China AI TAM would be incremental upside, as current data center forecasts exclude China revenues.
Management's guidance around Blackwell execution and the de-risked China outlook alleviates investor concerns that had restrained the stock over the past year. With the GB200 NVL systems fully ramping and strong cloud and enterprise interest, Nvidia's positioning in the ongoing AI wave appears reinforced even as macro uncertainties persist.
Investors should care because these developments validate Nvidia's roadmap and could drive upside to consensus estimates, especially if sovereign commitments and China re-entry accelerate. Also, from the chart we can see that consensus estimates point to over a 20% bump from its current price. In fact, the GF value is at $273, which is an enormous upside from current levels.
