Nvidia (NVDA) shares are extending losses this morning in the build up to “Liberation Day.”
President Donald Trump has used that term to describe April 2. On this day, he plans on implementing new “reciprocal” tariffs on imports from several countries to address trade imbalances and promote American-made products.
However, investors are concerned that new levies will lead to trade tensions, and potentially a recession that would weigh on tech stocks.
These fears have already resulted in a 22% decline in the NVDA share price over the past three months.
Bernstein Says Buy Nvidia Stock on the Pullback
Nvidia shares have also been a disappointment in the year to date because investors are concerned of a potential AI slowdown ahead.
But these fears may be blown out of proportion since they are restricted to the investors only – companies that are actually spending on AI are signalling no signs of an impending deceleration, according to Bernstein analyst Stacy Rasgon.
Rasgon continues to rate the AI stock at “Outperform.” His $185 price target currently indicates potential upside of a whopping 76% from current levels.
China’s DeepSeek Is Not a Threat for NVDA Shares
Bernstein is keeping positive on Nvidia stock also because DeepSeek’s recent AI model, contrary to initial assumptions, has actually resulted in an increase in compute demand.
In January, the Chinese startup said building its “R1” model cost significantly less than ChatGPT.
That bodes well for NVDA since “cost reduction, in general, is good. It drives demand. That’s been true in semiconductors for decades,” the firm’s analyst Stacy Rasgon told CNBC in a recent interview.
Plus, Nvidia’s chief executive Jensen Huang expects R1’s need for computational power to be as much as 100 times more than non-reasoning models, which paints a rosy picture of what lies ahead for Nvidia shares as well.
Nvidia Headwinds to Prove Short-Lived
While Nvidia stock has failed to catch a floor in recent months, Wall Street expects aforementioned headwinds to prove short-lived.
Analysts currently have a consensus “Strong Buy” rating on NVDA with a mean target of about $177 that indicates potential upside of 68% from here.
