BofA analysts predict the company will report better than expected fiscal fourth quarter earnings on February 26. However, they caution that guidance for the first quarter could be weaker due to factors like the transition to Blackwell chips, declining demand for Hopper, and China related restrictions.
Despite potential stock volatility after the earnings report, BofA believes investor confidence will grow as Nvidia moves toward its next generation products. The firm maintains Nvidia as its top sector pick, emphasizing its role as more than just a chipmaker it’s a full computing platform.
BofA highlights Nvidia’s ability to integrate hardware and software, a major advantage in the fast moving AI space. The firm also sees Nvidia’s valuation as appealing, with price to earnings estimates of 31x for 2025 and 24x for 2026 toward the lower end of its historical range of 25x-56x.
Looking ahead, Nvidia’s GTC conference on March 17 could be a big moment. The company is expected to unveil its GB300 and Rubin chips, pushing deeper into robotics and quantum computing.
Meanwhile, the broader semiconductor sector remains strong. BofA notes that the Philadelphia Semiconductor Index (SOX) rose 3% last week, outpacing the S&P 500’s 1.5% gain. Industrial and automotive chipmakers especially those less dependent on AI are benefiting from Europe’s economic recovery, Chinese stimulus efforts, and improving industrial inventories.
