BofA on Nvidia stock: ‘Compelling growth at compelling valuation’Despite some short-term headwinds, BofA analysts view these challenges as an attractive buying opportunity.
BofA is particularly optimistic about Nvidia’s role in the next generation of large language models , including OpenAI's GPT-5 and Meta’s Llama 4, which are expected to bring significant advancements in AI capabilities. The analysts also initiated a 2% position in Adobe, noting that"design is one of the most tangible use cases" of generative AI.
On the other hand, this concentration could offer an"opportunity to diversify into potential beneficiaries of these technologies through cheaper companies outside of the dominant few," the note adds.For Micron, a key player in the AI boom, the analysts expect the company to benefit from better pricing in DRAM and NAND, with AI-related tailwinds boosting its HBM market share. Micron’s partnership with NVIDIA, in particular, is expected to support these gains.
In addition, they are confident that Oracle can expand its operating margins to 45% by FY26 through “cloud margin expansion, sales and R&D efficiencies, and leverage from scale.”The analysts emphasized that while they remain confident in Super Micro’s ability to regain compliance with regulators, the near-term uncertainty is a key factor in the rating change.