There could be a new king of the chipmakers in the next few months, according to Citi analysts. The firm put Nvidia (NASDAQ:NVDA) on its "positive catalyst watch," and named it its top semiconductor pick for the next few months. Analysts cited strong data-center growth in 2020.
Another Wall Street trader is bullish the stock.
"It should continue to outperform the group as a whole, so I do expect this relative strength over the rest of the semis to continue," Mark Newton, founder of Newton Advisors told the media on Friday.
Still, he’s not ready to jump in right here after a 33% rally in three months.
He said he would look to buy the stock if shares pulled back to the $220 region. That implies 10% downside from Friday’s close.
"It has gotten very overbought, and of course it was overbought throughout all 2016. You’re starting to see evidence of really negative momentum divergence which is happening to the semi group as a whole. It’s gotten very extended," said Newton.
NVDA stock has made a commendable comeback after losing about half of its value in the last quarter of 2018. The reasons for the market's ire were the company's struggles in its gaming business due to the cryptocurrency bust and slowing growth in its data center platform. As of Jan. 7, NVIDIA stock is just 17% off its all-time closing high, set on Oct. 1, 2018
Nvidia shares started Monday up $3.95, or 1.6%, to $248.27
