An Nvidia H100 GPU (Source: Nvidia)

DeepSeek, Shallow Impact

Bank of America recommits to Nvidia as “top pick” in chips

The GPUs may be pricey, but the stock isn’t, BoA analysts say.

2/4/25 2:00PM

Nvidia’s relatively inexpensive valuation coupled with high confidence that CEO Jensen Huang will hit all the right notes when the chip designer reports earnings on February 26 have prompted Bank of America analysts to reaffirm the stock as their top pick in the sector.

Bank of America analysts led by Vivek Arya describe the stock’s valuation, which is near its cheapest in the past five years based on the 12-month forward price-to-earnings ratio, as “compelling.”

Of course, that’s contingent on estimates for rapid growth for Nvidia (not just in 2025, but also for 2026) to remain intact or rise further. Encouragingly, DeepSeek isn’t even making a shallow mark on hyperscalers’ capex plans so far.

“Despite DeepSeek’s supposed ‘revolutionary’ optimizations, there is no change thus far to spending intentions at NVDA large customers including Microsoft and Meta,” BofA said.

Arya and co. think a trio of catalysts for the company will be discussed in its late February conference call, which should bolster investors’ faith in its growth outlook.

“The call could mark the trough in investor sentiment as: 1) we expect NVDA to reassure on Blackwell execution, 2) signal confidence around FY26/CY25 with 60%+ YoY growth in data center sales (still leaves headroom vs. TSMC’s call for AI to grow 100%+ YoY in CY25E), and 3) create excitement ahead of flagship GTC Conf. (Mar 17) where focus shifts to solid pipeline (GB300, Rubin), and physical AI (robotics),” they conclude.

Arya’s price target for the stock is $190, about 60% above where shares are currently trading.

Nia Warfield, Luke Kawa

11h

US stocks in holding pattern ahead of Wednesday’s Fed decision

Major indexes closed down 0.1%.

Luke Kawa

14h

GameStop can’t stop winning, on track for longest streak of gains since 2022

Unless we jinx it, GameStop is poised for its longest winning streak since 2022, with shares up 3% as of 2:04 p.m. ET.

The video game and collectibles retailer hasn’t posted a down day since September 4 and is poised for its eighth consecutive day of gains. Shares are up nearly 18% over this period, versus a 1.6% advance for the S&P 500.

The bulk of these gains came in the wake of the company’s stellar second-quarter earnings report, which exceeded expectations on the top and bottom lines as well as marking the fifth consecutive quarter of positive operating cash flow generation for the first time in its history.

Including this one, the company has posted eight or more consecutive days of gains on 25 occasions during its history as a publicly traded company.

Its last seven-session winning streak came in mid-July of last year, about a month after Keith Gill (aka Roaring Kitty) disappeared from the scene after his brief reappearance, as part of a relatively violent market rotation into small-cap stocks.

Max Knoblauch

14h

Nio surges to an 11-month high following an upgrade from UBS ahead of its new SUV launch

Chinese EV maker Nio is climbing for the fourth straight trading day, following an upgrade from UBS to “buy” from “neutral.” Nio’s nearly 7% jump propelled the stock to its highest level since last October.

UBS also bumped its price target for Nio up to $8.50, a 37% hike.

Nio will begin deliveries of its new ES8 SUV this weekend, priced to compete with Tesla’s Model Y. Last week, the EV maker said it planned to raise up to $1 billion on a share offering.

According to UBS analyst Paul Gong, Nio’s latest products “could further attract consumers after the US $1 billion equity offerings strengthened visibility on its healthy operations.”

J. Edward Moreno

15h

Moderna is up on the release of positive results for reformulated Covid vaccine

Moderna rose on Tuesday after it announced encouraging trial results for its next COVID-19 vaccine.

The data from its phase 4 clinical trial showed the 2025-26 formula of its COVID-19 vaccine, which targets a new variant and was recently approved by the FDA with some limitations, produced a strong immune response among people ages 12 through 64. Covid vaccine sales account for virtually all of Moderna’s revenue.

The company has had a tumultuous year as the Trump administration makes moves to limit who is able to access the vaccine. Last month, the FDA limited approval for the coronavirus vaccine to higher-risk populations; previously, anyone older than 6 months was eligible for it.

Max Knoblauch

15h

Rivian climbs as it breaks ground on a $5 billion EV plant that could produce 200,000 vehicles a year by 2028

EV tax credits may be ending this month, but Rivian’s still optimistic about future demand.

The electric vehicle maker on Tuesday broke ground on its delayed $5 billion Georgia plant that it says will be able to produce 200,000 vehicles per year by 2028. (For comparison, Rivian expects to deliver up to 46,000 EVs this year.) Its shares climbed more than 6% on the news.

The plant will create 7,500 permanent jobs once complete, according to Rivian, with the first phase of production beginning next year.

2026 also marks the planned launch year for Rivian’s R2 electric SUV, expected to start around $45,000 and compete with Tesla’s Model Y. Earlier this month, Lucid confirmed that it too would be creating a roughly $50,000 electric SUV.

If it seems like an odd time to build an EV plant, it probably is. But unlike larger rivals GM and Honda, Rivian doesn’t have the ability to scale back its EV ambitions — they’re the only vehicles the automaker produces. Last month, the company posted a steeper loss than analysts expected, losing $1.12 billion over its second quarter.

It's 'do or die' for electric vehicle maker Rivian as it breaks ground on a $5 billion plant