Monday’s sharp decline for Nvidia and basically everything else tied to the artificial intelligence trade was not enough to change the minds of Wall Street analysts who have been cheerleading the trend. “Citi tech analysts remain bullish on NVDA, and our updated bubble work does not point to an end of the US equity bull market,” Citi’s Adam Pickett said in a note to clients, in a note representative of the optimism among the sell-side crowd. Start with semiconductor stocks, where Wall Street analysts remain cautiously optimistic even after Nvidia suffered the biggest one-day loss of market cap in U.S. history. Morgan Stanley’s Joseph Moore cut his price target on several major chipmakers, including Nvidia and Broadcom , but kept his overweight ratings on the stocks. Benchmark’s Cody Acree identified several smaller semiconductor stocks that now look “oversold,” including Tower Semiconductor and Semtech . Of course, Nvidia already had a positive rating from more than 90% of the analysts covering it before Monday’s sell-off, according to LSEG. That looks glaring after the huge drop, but it has generally been good advice, as the stock is still up more than 90% over the past year. NVDA 1Y mountain Nvidia’s long-term gains are still impressive despite Monday’s sell-off. One phrase that recurred several times across Tuesday’s research notes was “buying opportunity.” UBS analyst Manav Gupta used those words in a note about midstream and natural gas energy stocks, which had been getting a boost from the expansion of power-hungry AI models. RBC Capital Markets analyst Rishi Jaluria echoed that in a note about software stocks and stuck to a positive outlook on Microsoft , which fell 2% Monday. “DeepSeek is, on the surface, a negative development. At the same time, Microsoft has architected its own applications (e.g. GitHub Copilot, M365 Copilot) to work with any LLM, not just those from OpenAI. … On balance, we believe Microsoft (and OpenAI) will likely remain well-positioned for GenAI and would be buyers of any weakness,” Jaluria wrote. Smilarly, JPMorgan analyst Samik Chatterjee upgraded IT stock Ciena to overweight, describing the 21% drop for the stock on Mondy as an ” entry point .” Another common theme was saying that the sell-off had gone too far. “We believe, however, this panic selling of the [data centers] seems overblown and disagree with the negative sentiment. Instead, we think that more efficient LLMs/training models will actually boost demand for high performance GPU companies and those that build data centers,” Erik Rasmussen of Stifel said in a note. Digital Realty and Equinix were two names in that group that got hit on Monday, falling 8.7% and 4.3%, respectively. And as for power generating stocks, which benefit from powering those data centers, Neil Kalton of Wells Fargo acknowledged there may be more volatility ahead but stuck to overweight ratings on names like Constellation and NRG Energy . “We think the knee-jerk reaction for the [Independent Power Producers] is overdone and that the AI landscape has not completely changed overnight,” Kalton said. — CNBC’s Michael Bloom contributed reporting.
