Why NVIDIA Stock Could Soar Despite Wall Street Downgrades

Key Points

• NVIDIA analysts downgraded and lowered their price targets but remain firm in their belief that the company's stock can rise 50% to a new high.
• The downgrades set up a stock price rebound that the Q2 earnings report could trigger. 
• Tariffs are an uncertainty, but one that will lead to accelerated onshoring of NVIDIA semiconductor manufacturing.

NVIDIA NASDAQ: NVDA analysts started reducing their ratings and price targets in late March, which presents a headwind for the stock price action.

MarketBeat tracks five consecutive negative revisions beginning March 20, including three price target reductions and two downgrades. The downgrades are from Buy or Strong Buy to Hold, and the net result could be a cap on the market. 

Regardless of where the consensus target forecasts the stock price, a trend in negative revisions saps investor appetite. This could lead to an even deeper market correction than NVIDIA has already seen. The risk now is that negative revisions will become the trend.

However, not all analysts are cutting their targets. The five-revision trend that began in late March ended in mid-April when Bank of America reiterated its rating and target. Analysts at Bank of America peg this stock at Moderate Buy, aligning with the broad consensus, and see it advancing to $200 or nearly 80% upside relative to the April 14th price action. They cite the tariff pause as a catalyst for the business.

While the pause does not end the risk of tariffs, it is seen as a catalyst for policy action on Capitol Hill to support and accelerate the onshoring of U.S. semiconductor manufacturing.  

NVIDIA Announces $500B U.S. AI Infrastructure Build-Out

NVIDIA plans to manufacture half a trillion dollars in AI infrastructure domestically within four years. 

The bold claim is supported by ongoing investment in Arizona and Texas facilities, including Taiwan Semiconductor NYSE: TSM and Foxconn, which are intended to ramp up production for NVIDIA and other prominent semiconductor firms.

The goal for NVIDIA is for 100% domestic production of its most advanced chips, including Blackwell and Rubin line-ups, front and back end, packaging, and testing. As it is, the company expects to begin ramping up domestic production at two Texas facilities within the next 12 to 15 months. It has already commissioned more than 1 million square feet of manufacturing space. 

NVIDIA Downgrades Set Stock Up to Surge in Q2

As much risk as there is for NVIDIA analysts to cap gains in 2025, the downside is limited because of the stock’s low valuation and outlook for business growth. NVIDIA revenue growth is expected to continue slowing due to the law of large numbers and maturing AI markets, but it will sustain a moderate to low double-digit pace through the end of the next decade. This forecast puts the stock under 10x its earnings by the middle of the next decade, presenting a generational buying opportunity.

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The stock price could easily double in this scenario, and the odds are high that it will rise significantly more because the forecasts are likely too low.

Clouds and economic headwinds in early 2025 impacted the outlook, but when they ease, global business, including AI infrastructure build, can regain momentum. The catalyst could come with the Q2 earnings report due at the end of May, when the company issues another solid report and provides positive guidance. 

NVIDIA Could Set New Highs Before Its Q2 Earnings Report

Because of the technical setup and analyst forecasts, NVIDIA could set new highs before its Q2 earnings report is released.

Although some analysts have trimmed targets and the consensus has fallen from a peak, it forecasts a 50% upside for this stock, sufficient to exceed the current all-time high by 1500 basis points and could be reached quickly.

Once this market clearly indicates it is moving higher, investor capital will start to flood into it and drive the stock price to the $190 range or higher.