Wells Fargo: ‘Load Up on Nvidia Stock Ahead of GTC 2025’
Nvidia (NASDAQ: NVDA) has experienced a temporary setback in its stock price, dropping 14% year-to-date due to multiple challenges. These include the emergence of DeepSeek, potential delays in Blackwell GPU shipments, and concerns over whether the company can sustain its rapid growth trajectory. Additionally, broader macroeconomic factors have contributed to the pressure.
GTC 2025: A Potential Catalyst for Nvidia’s Rebound
Investors are eyeing Nvidia’s GTC 2025, which runs from March 17-21, as a key event that could reignite the stock’s momentum. Historically, Nvidia’s stock has significantly outperformed the SOX index during and after GTC week.
- Over the past five years, Nvidia shares have gained an average of 6.4% during GTC week, outperforming the SOX index by seven percentage points.
- In the following two weeks, the stock has risen by an average of 4.5%, beating the index by 2.4 percentage points.
- The stock is trading at a 35% discount compared to its three-year median forward P/E and EV/EBIT multiples, making a strong case for a potential comeback.
Wells Fargo’s Bullish Stance on Nvidia
Top-ranked Wells Fargo analyst Aaron Rakers remains optimistic about Nvidia’s prospects ahead of GTC 2025. He suggests that now is a good time to buy and maintains an Overweight (Buy) rating on the stock.
- Rakers has set a price target of $185, implying a 60% upside from current levels.
Key Themes to Watch at GTC 2025
Rakers has identified several crucial topics that could shape Nvidia’s stock movement post-GTC:
1. Co-Packaged Optics (CPO) and Silicon Photonics (Sipho)
- While Nvidia is unlikely to introduce CPO or SiPho at the GPU level this year, there is speculation about their integration within the networking and switch portfolio.
- This could begin a long-term shift in Nvidia’s architecture, potentially appearing in the next-generation Rubin architecture.
2. Next-Gen Blackwell Ultra (GB300) GPUs
- Nvidia has confirmed that GB300 shipments will start in Q3 2025, with mass production ramping up in Q4.
- Investors closely monitor potential delays, especially after the initial hurdles with Blackwell GB200.
3. The Growing Demand for Compute Scaling
- As generative AI moves from research to full-scale deployment, Nvidia is expected to emphasize the growing need for computing power.
- This could reinforce Nvidia’s dominance in AI infrastructure.
4. Nvidia’s Networking Strategy: Spectrum-X Ethernet vs. InfiniBand
- With Nvidia’s networking revenue declining for two consecutive quarters, attention is shifting to its Spectrum-X Ethernet strategy.
- The industry is moving towards large-scale Ethernet clusters, possibly reducing dependence on Quantum InfiniBand.
Analyst Consensus: Strong Buy with Significant Upside
Wall Street analysts remain overwhelmingly bullish on Nvidia:
- 39 analysts rate the stock as a Buy, while only three have issued a Hold recommendation.
- The average price target is $177.41, indicating a potential 53% upside over the next 12 months.
Final Thoughts
With GTC 2025 just around the corner, Nvidia is positioned for a potential stock rebound. If the event delivers firm product updates and roadmap clarity, investors could see significant upside in the coming months. Wells Fargo’s Aaron Rakers believes the current dip presents a buying opportunity, making this a crucial period for Nvidia investors.