Nvidia investors have a key catalyst on the horizon, according to Bank of America.
Strategists at the bank are watching May 15, the day the US government will roll out the so-called AI Diffusion Rule, a regulatory framework that aims to control foreign countries' access to high-tech chips from the US.
The rules would impose restrictions on some sales of Nvidia's chips and potentially narrow its market, but the event could actually end up being positive for Nvidia stock. That's because the company could recover from its recent slump once wider geopolitical concerns are "sized and priced," the bank said on Thursday.
"There is a wide range of outcomes, and NVDA stock could stay volatile till the May-15 date, aka 'Liberation Day' as a catalyst when the impact could be reflected in the stock," strategists said.
There are several other catalysts that could boost Nvidia stock, the bank said. Strategists pointed to a potential recovery in GM, which announced a partnership with Nvidia earlier this month, as well as Nvidia's new Blackwell Ultra chip.
In its most recent earnings call, CEO Jensen Huang said demand for Nvidia's existing Blackwell chip was "extraordinary."
"Meanwhile, we believe the stock is providing a particularly attractive opportunity for one of the most unique, high-quality tech franchises leading the largest and fastest growing secular trends," the bank said.
Bank of America reiterated its "Buy" rating on the chipmaker and issued a price target of $200 a share, implying 75% upside from current levels. The stock was trading around $113 on Thursday morning and is down 18% year-to-date.
After back-to-back years of stellar growth, Nvidia stock has lost momentum this year thanks to budding concerns about US AI dominance, as well as jitters related to tariffs and the outlook for the economy.
Earlier this month, investors had their eyes set on Nvidia's GPU Tech Conference, dubbed the "Super Bowl of AI," where Huang gave key updates on the firm's new projects and what it sees for the path ahead.
Shares have sagged this week on news that Nvidia is at risk of losing business in China, thanks to new energy-efficiency rules that would bar sales of some chips. The stock fell as much as 5% Wednesday morning and edged lower another 1% on Thursday.
