Nvidia Corp.’s stock has had a rough year, shedding more than 40% so far in 2022 amid concerns about challenges in gaming and in China, as well as a large inventory write-down. But Cowen & Co. analyst Matthew Ramsay says now is the time to own the chip name. He named it his “best idea” for 2023 in a Monday note to clients.
The issues Nvidia
NVDA,
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has had over the past year “were just short-term distractions from the acute fundamental thesis: NVIDIA is the leader in accelerated compute and the key enabler for AI [artificial intelligence] across vertical industries — full stop,” Ramsay wrote. See also: Alphabet stock on track for longest losing streak in more than four years In his view, Wall Street underappreciates a number of elements of Nvidia’s story. For one, it discounts “how early we are in AI penetration, and the ability for [Nvidia] to create new markets [and] use cases through product innovation (both hardware and software).” Additionally, Ramsay thinks that investors aren’t giving Nvidia enough credit for its potential to keep increasing average selling prices on the back of scaling artificial-intelligence performance. “The combination of these drives our above-consensus estimates, particularly in Datacenter,” he said. Read: Nvidia’s mixed earnings spark optimism: It’s ‘easier to suggest that the bottom for numbers is likely in’ Ramsay is upbeat about “several strong …