1 Wall Street Analyst Thinks Nvidia Stock Is Going to $150. Is It a Buy?

Chip export restrictions to China have been an overhang on Nvidia (NASDAQ: NVDA) shares. But after dipping below the $100 level, Bank of America analyst Vivek Arya believes the leading artificial intelligence (AI) chipmaker is worth buying.

Earlier this week, the analyst lowered the firm's price target on the shares from $160 to $150, implying 44% upside over the recent $104 share price, while maintaining a "buy" rating.

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Why buy Nvidia stock

Nvidia disclosed on April 15 it would take a $5.5 billion financial hit as a result of the U.S. government's licensing requirement for its H20 chip designed for the China market. Last year, China made up 13% of the company's revenue. It's a hit in the near term, but long term, Nvidia has more opportunities to drive growth.

The analyst sees export restrictions of advanced AI chips causing a marginal shortfall to Nvidia's revenue and earnings in the near term, but the recent dip in the stock, which shaved more than $300 billion off Nvidia's market cap, more than accounts for the revenue loss.

Nvidia has already hauled in $11 billion of revenue from sales of its Blackwell AI computing platform, and that figure will continue to grow. The demand from tech giants to install Blackwell in their data centers is expected to drive strong growth this year.

The analyst sees Nvidia's margins improving in the second half of the year as it continues to ramp production of Blackwell and prepare for Blackwell Ultra.

Even with uncertainty for the economy, analysts expect Nvidia's revenue and earnings to grow more than 50% this year. Yet investors can buy the stock for just 22 times forward earnings estimates.

No one has a crystal ball for where Nvidia shares will be in one year, especially given market volatility. But given Nvidia's dominant position as the leading supplier of AI chips, the long-term upside from buying shares now appears to far outweigh the risks in the short term.

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Bank of America is an advertising partner of Motley Fool Money. John Ballard has positions in Nvidia. The Motley Fool has positions in and recommends Bank of America and Nvidia. The Motley Fool has a disclosure policy.