Nvidia's stock storms back to score a rebound not seen in three years
By Emily Bary
The stock was the second-best S&P 500 performer on the day
Nvidia Corp. shares snapped back with a vengeance on Tuesday after a three-session slide that carried them into correction territory.
The stock staged a big rally in Tuesday's action, rising 6.8% to clock in as the second-best performer in the S&P 500 SPX on the day. That rebound came after Nvidia shares (NVDA) lost 12.9% over the preceding three-session stretch.
This marked the first time since March 9, 2021 that the stock rose 6% or more after losing 6% or more the session prior, according to Dow Jones Market Data.
See also: Nvidia is one of the 'three horsemen of AI.' Here are the others.
Morgan Stanley reiterated its bullish view of Nvidia's stock in a Tuesday report that summarized a recent trip to Taiwan.
"Demand-side indications remain robust, with surprising demand still for H100, growing visibility for limited H200 ramp, Blackwell demand booked out through mid-next year, and a strong ramp of the H20 for the China market," Morgan Stanley's Joseph Moore wrote in the note. The H100 is Nvidia's older chip, with the H200 its current line. Blackwell is due to start shipping later this year.
Moore acknowledged a "mixed" supply-chain picture, though not unexpectedly so. For instance, it makes sense that the H100 has "very short" lead times given where Nvidia is in its product journey, he said.
"We are, of course, aware that the stock has added nearly a trillion in market cap since earnings, so a good outlook is at least partly discounted - but we can report that the outlook does remain good," he added.
Don't miss: As Nvidia executives sell stock, here's what investors need to know
UBS analyst Karl Keirstead also found strong Nvidia sentiment in his recent survey work of enterprise executives.
"As expected, and consistent with the results of our prior survey, Nvidia remains the dominant choice for both training and inference workloads, with respondents now leaning much more into Hopper (H100 + H200) and away from legacy and lower-end GPUs," or graphics processing units, he wrote.
Further, rack-scale systems are set to see far more demand, namely for model work, Keirstead wrote.
Read: 11 favored semiconductor stocks expected to outperform Nvidia over the next year
-Emily Bary
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06-25-24 1625ET
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