Nvidia stock (NVDA) led gains among “Magnificent Seven” tech stocks to start the new year after a group-wide selloff in the final days of 2024. Shares of the AI ​​chip maker rose 3% on Thursday.

Nvidia shares fell 4% between Christmas Eve and New Year’s Eve as megacap tech stocks fell across the board in the absence of a “Santa Claus” rally, when the stock market typically rallies between Dec. 24 and Jan. 2 . Tesla (TSLA) shares fell nearly 13% in the period, while Amazon (AMZN) and Microsoft (MSFT) shares fell more than 4%, while Meta (META) and Google (GOOG) fell just under 4% , while Apple (AAPL) fell 3%.

Despite the December decline, Nvidia shares still ended 2024 up more than 44% year over year. Wall Street analysts remain bullish on the stock, estimating that the stock will rise from its current level of $138 to around $173 next year, according to data from Yahoo Finance.

Bank of America’s Vivek Arya told Brian Sozzi on Thursday’s Opening Bid podcast that broader market forces and company-specific issues drove the selloff in Nvidia stock late last year.

“What we have seen in the market is a rotation of money from semiconductors to software,” Arya said, noting that the latter is less exposed to U.S. trade restrictions on goods to and from China. He added that for Nvidia, “the last two quarters haven’t really been clean because they’re going through growing pains from a generation of products that was Hopper to the new generation of products.”

Arya was referring to concerns about delays in shipping the company’s new Blackwell artificial intelligence chips.

“From our perspective, these are short-term issues,” he said. This could create a buying opportunity: While Magnificent Seven competitors are trading at twice their average 2025 earnings growth estimates, Arya noted that Nvidia shares are trading at less than one times the company’s consensus earnings growth next year become.

Arya has a Buy rating on Nvidia stock and expects the stock to rise to $190 in the next 12 months.

Shares of Nvidia and its Magnificent Seven rivals have benefited from investors’ massive bets on artificial intelligence as well as earnings growth. As Yahoo Finance’s Josh Schafer reported in about three-quarters of reports, the combination of Apple, Alphabet, Microsoft, Amazon, Meta, Tesla and Nvidia increased their profits by 33% year-over-year in 2024, compared to growth of just 4, 2% in 2024 the other 493 S&P 500 companies, according to FactSet data.

Of course, skeptics warn of a bubble that could burst and send AI-based stocks crashing as the hype surrounding the new technology subsides and Big Tech’s spending on artificial intelligence infrastructure slows. Overall, however, Wall Street analysts remain convinced that the AI ​​enthusiasm will continue.

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