Nvidia’s Worst Month in a Year Is a Gift For Bulls

Investors that missed out on this year’s dizzying rally in Nvidia Corp. have an attractive entry point this month.

That’s according to Morgan Stanley, which argues that concerns about demand sustainability for Nvidia’s chips used in artificial intelligence computing will soon be quelled by management comments or financial results. That will make the stock’s decline of 14% in September an excellent buying opportunity, analysts led by Joseph Moore said.

“Numbers are likely to continue to be strong, and to the extent that investors are concerned about near term demand that’s a good thing, as it is a negative thesis that the company can quickly disprove,” the analysts wrote in a research note on Monday.

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Nvidia’s valuation has become a subject of intense debate among investment professionals after its stock tripled this year amid soaring demand from customers rushing to beef up AI computing capacity. While Wall Street analysts are nearly universally bullish, skeptics like Rob Arnott, founder of Research Affiliates LLC, argue that Nvidia is priced so high that it can’t possibly live up to expectations. It’s even too expensive for Ark Investment Management’s Cathie Wood.