Nvidia shares (NVDA) led gains among ‘Magnificent Seven’ tech stocks to start the new year after a group-wide sell-off in the final days of 2024. Shares of the AI chipmaker rose 3.5% early Friday after gaining about 3% the day before. .
The rise follows a 4% drop between Christmas Eve and New Year’s Eve, as mega-cap tech stocks fell across the board in the absence of a “Santa Claus” rally, where the stock market typically sees a rise between December 24 and January 2. Tesla (TSLA) the stock plunged nearly 13% during this period, while Amazon (AMZN) and Microsoft (MSFT) fell by more than 4%. Meanwhile, Meta (META) and Google (GOOG) fell just under 4%, as did Apple (AAPL) fell 3%.
Even with its decline in December, Nvidia stock still ended 2024 up more than 150%. Wall Street analysts have remained optimistic about the stockestimates that shares will reach around $173 over the next year, from their current level of $138, according to data from Yahoo Finance.
Vivek Arya of Bank of America told Brian Sozzi the opening offers podcast On Thursday, broader market forces and company-specific issues caused Nvidia shares to sell off 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 U.S. trade restrictions on goods to and from coming from China. He added that for Nvidia, “the last two quarters haven’t been really clear, because they’re going through some growing pains, going from a generation of product that was Hopper to the new generation of product.”
Arya was referring to concerns about delays in shipments of the company’s new Blackwell artificial intelligence chips.
“In our opinion, these are short-term problems,” he said. This could create a buying opportunity: While its Magnificent Seven peers are trading at twice their average earnings growth estimates for 2025, Arya noted that Nvidia shares are trading at less than one times earnings growth. consensus earnings of the company for the coming year.
Arya has a Buy rating on Nvidia stock and sees its shares rising to $190 over the next 12 months.
Shares of Nvidia and its Magnificent Seven peers have benefited from investors’ massive bets on artificial intelligence as well as profit growth. As Josh Schafer of Yahoo Finance reportedIn about three-quarters of the reports, the combination of Apple, Alphabet, Microsoft, Amazon, Meta, Tesla and Nvidia increased its year-over-year profits by 33% in 2024, compared to just 4.2% in growth for the other 493 companies in the S&P 500, according to FactSet data.
