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Investing.com -- Nvidia (NASDAQ:NVDA) was upgraded to Buy from Neutral at D.A. Davidson as it expects the overwhelming demand for AI compute to continue to fuel sustained growth in the AI chipmaker.
The broker lifted its price target to $210 from $195 alongside the upgrade.
“Our increasingly optimistic view of the growth in AI compute demand supersedes our list of concerns regarding NVDA,” analyst Gil Luria said in a Thursday note.
Luria expects Nvidia to remain at the center of the AI trade, with demand strong enough to carry growth into next year and likely beyond.
The analyst acknowledged headwinds tied to hyperscaler capital spending, customer-built chips such as Google’s TPUs, volatility in China demand, and supply constraints ranging from energy to semiconductor manufacturing.
Even so, he stressed that “the most important thing – the overwhelming growth in demand for compute – is the only thing that matters.”’
“NVIDIA should be able to sustain growth over the next two years, regardless of which segment that growth comes from,” Luria said.
“While we are not ready to endorse sell-side consensus, especially given uncertainty around China, we believe investors will look through small misses, as they have done the last couple of quarters,” he added.
At 28 times fiscal 2026 earnings and growing profits around 40%, Luria argues Nvidia may now be “the least expensive direct investment in the growth of AI.”
The analyst contrasted that with Apple (NASDAQ:AAPL), which D.A. Davidson downgraded to Neutral, noting both trade at roughly the same multiple, but Apple’s expected earnings growth is only 9%.
“While AAPL may still offer defense in an uncertain environment, we prefer to go on offense, given the prospects for AI compute,” Luria concluded.