Nvidia's AI Strategy: Analyst Sees Buying Opportunity in NVDA Stock

Nvidia shares fell about 2.5% Monday, heading for a seventh straight loss, ahead of Wednesday's fiscal Q2 2027 earnings report, though one analyst sees a buying opportunity. Cantor Fitzgerald's CJ Muse upgraded the stock to Buy, citing a potential quick rebound once momentum returns. Muse argues Nvidia's "financial engineering" — including equity stakes in AI firms like OpenAI and Anthropic, plus revenue-sharing deals with neocloud providers CoreWeave and Nebius — creates switching costs that make its GPUs harder to replace. He projects earnings of $17 per share for calendar 2027 and $25 for 2028, making the stock look cheaper at roughly 14 times and 10 times those estimates, with a $350 price target. The stock has gained about 12% this year, lagging the PHLX Semiconductor Index's 59% rise. Risks include custom chips from major cloud customers eroding Nvidia's market share and concerns that its financing model may not create durable barriers.