{"id":32148,"date":"2022-06-01T15:03:12","date_gmt":"2022-06-01T15:03:12","guid":{"rendered":"https:\/\/harchi90.com\/bank-of-america-names-nvidia-a-top-pick-as-the-valuation-in-chip-stocks-becomes-more-attractive\/"},"modified":"2022-06-01T15:03:12","modified_gmt":"2022-06-01T15:03:12","slug":"bank-of-america-names-nvidia-a-top-pick-as-the-valuation-in-chip-stocks-becomes-more-attractive","status":"publish","type":"post","link":"https:\/\/harchi90.com\/bank-of-america-names-nvidia-a-top-pick-as-the-valuation-in-chip-stocks-becomes-more-attractive\/","title":{"rendered":"Bank of America names Nvidia a top pick as the valuation in chip stocks becomes more attractive"},"content":{"rendered":"<div>\n<div data-test=\"articleBody-2\" data-analytics=\"RegularArticle-articleBody-5-2\">\n<p><span hidden=\"\" aria-hidden=\"true\" class=\"ArticleBody-extraData\"><span hidden=\"\" aria-hidden=\"true\" class=\"ArticleBody-extraData\"><span hidden=\"\" aria-hidden=\"true\" class=\"xyz-data\">The case to buy Nvidia just got even more compelling, according to Bank of America.  Analyst Vivek Arya named Nvidia a top pick, saying in a Tuesday note that chip stocks are already pricing in a recession, even as they generate better free cash flow margins than stocks in the broad market index.  &#8220;While macro factors can enhance stock volatility, we believe the recent 36% peak-trough PE multiple contraction in the SOX index (vs. 27% downturn historically) already reflects a medium-sized &#8216;recession,'&#8221; Arya wrote.  &#8220;Meanwhile chip stocks are generating ~ 23% FCF margins (2x + more profitable than S &#038; P 500 stocks) and trading at compelling 22x CY22 EV \/ FCF, which is below R1K value stock multiples.&#8221;  Bank of America has a $ 270 price objective assigned to Nvidia.  The price target implies nearly 45% upside from Tuesday&#8217;s closing price.  Nvidia shares are down nearly 37% year to date.  Additionally, Bank of America believes that Nvidia services the most &#8220;resilient&#8221; industries, including cloud computing and artificial intelligence, industrial, electric vehicle and driverless technology sectors.  &#8220;In prior times, only a single end-market, say PCs or smartphones would drive semis. Now there are multiple end-markets served by a consolidated set of chip vendors, delivering proprietary products and generating solid FCF margins,&#8221; Arya wrote.  &#8220;Stronger pricing and more flexible hybrid manufacturing \/ use of outsourced foundries could also help reduce gross margin \/ FCF volatility of semis in the next inevitable downturn,&#8221; he added.  Chip stocks could also get a boost after China lifts some Covid restrictions, which could &#8220;re-energize&#8221; investor interest in the sector, Arya said.  \u2014CNBC&#8217;s Michael Bloom contributed to this report.<\/span><\/span><\/span><span class=\"HighlightShare-hidden\" style=\"top:0;left:0\"\/><\/p>\n<\/div>\n<\/div>\n<p>    .<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The case to buy Nvidia just got even more compelling, according to Bank of America. Analyst Vivek Arya named Nvidia a top pick, saying in a Tuesday note that chip stocks are already pricing in a recession, even as they generate better free cash flow margins than stocks in the broad market index. &#8220;While macro &hellip;<\/p>\n<p class=\"read-more\"> <a class=\"\" href=\"https:\/\/harchi90.com\/bank-of-america-names-nvidia-a-top-pick-as-the-valuation-in-chip-stocks-becomes-more-attractive\/\"> <span class=\"screen-reader-text\">Bank of America names Nvidia a top pick as the valuation in chip stocks becomes more attractive<\/span> Read More &raquo;<\/a><\/p>\n","protected":false},"author":1,"featured_media":32149,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"default","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","spay_email":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true},"categories":[8],"tags":[2492,116,118,112,5723,8557,231,130,232],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/image.cnbcfm.com\/api\/v1\/image\/105398954-1534357352806rts1xdsi.jpg?ssl=1","jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"fifu_image_url":"https:\/\/image.cnbcfm.com\/api\/v1\/image\/105398954-1534357352806rts1xdsi.jpg?v=1612996989&w=1920&h=1080","_links":{"self":[{"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/posts\/32148"}],"collection":[{"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/comments?post=32148"}],"version-history":[{"count":0,"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/posts\/32148\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/media\/32149"}],"wp:attachment":[{"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/media?parent=32148"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/categories?post=32148"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/tags?post=32148"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}