Nvidia stock (NVDA) led gains among the “Magnificent Seven” tech stocks to start the new year after a group-wide sell-off in the last days of 2024. Shares of the AI chipmaker were up 3.5% early Friday after gaining roughly 3% the prior day.
That upswing follows Nvidia’s 4% dip between Christmas Eve and New Year’s Eve as megacap tech stocks dropped across the board in the absence of a “Santa Claus” rally, where the stock market typically enjoys a surge between Dec. 24 and Jan. 2. Tesla (TSLA) stock plunged nearly 13% over that time frame, while Amazon (AMZN) and Microsoft (MSFT) dropped more than 4%. Meanwhile, Meta (META) and Google (GOOG) fell just under 4%, just as Apple (AAPL) dipped 3%.
Even with its December decline, Nvidia shares still ended 2024 up more than 44% from the prior year. Wall Street analysts have remained bullish on the stock, estimating shares will rise to roughly $173 over the next year from their current level of $138, according to Yahoo Finance data.
Bank of America’s Vivek Arya told Brian Sozzi on the Opening Bid podcast Thursday that broader market forces and company-specific issues drove the sell-off in Nvidia stock late last year.
“What we have seen in the market is a rotation of money from semiconductors to software,” Arya said, noting that the latter was less exposed to US trade restrictions on goods to and from China. He added that for Nvidia, “the last two quarters have not been clean, really, because they’re going through growing pains from one generation of product that was Hopper to the new generation of product.”
Arya was referring to concerns surrounding delays in shipments of the company’s new Blackwell artificial intelligence chips.
“In our view, these are short-term issues,” he said. That could create a buying opportunity: While its Magnificent Seven peers are trading at two times their average earnings growth estimates for 2025, Arya noted that Nvidia shares are trading at less than one times the consensus earnings growth for the company this upcoming year.
Arya has a Buy rating on Nvidia stock and sees 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 earnings growth. As Yahoo Finance’s Josh Schafer reported, through roughly three-quarters of reports, the combination of Apple, Alphabet, Microsoft, Amazon, Meta, Tesla, and Nvidia grew earnings year over year by 33% in 2024, compared to just 4.2% growth for the other 493 S&P 500 companies, per FactSet data.
