The senior analyst at Wolfe Research has picked Nvidia as his top 2026 artificial intelligence stock due to an opportunity from pullback of its multiple.
- According to Chris Caso, much of Nvidia’s upside comes from pricing.
- While the market worries about competitive pressure from other chipmakers and AI players, Caso believes Nvidia will be able to maintain its market position.
- The analyst also noted that Nvidia’s edge comes from its software advantage.
Chris Caso, senior analyst at Wolfe Research, has switched gears from Micron Technology (MU) to Nvidia Corp. (NVDA) as its top pick in 2026 in the artificial intelligence space.
In an interview with CNBC TV on Tuesday, Caso said that the analyst sees an opportunity in Nvidia right now as the multiple has pulled back.
“In Nvidia’s case right now, the multiple is in the low 20s right now on ’26 numbers. We see upside to those numbers,” he said. “The stock hasn’t done much in the last six months, and we do see some pretty strong fundamentals ahead for this year.”
Shares of NVDA gained over 13% in the past six months. Meanwhile, shares of MU gained over 185% while shares of GOOG rose over 84% in the same time.
Last year, Caso backed Micron, adding it to the ‘Wolfe Alpha List’. Caso said the firm considered it a poor man’s way of playing AI because of its attractive valuation at the time. MU stock is up over 250% in the last one year.
The Nvidia Upside
According to Caso, much of Nvidia’s upside comes from pricing. While the market worries about competitive pressure from other chipmakers and AI players, Caso believes Nvidia will be able to maintain its market position.
“And we think the pricing tells the story there about both the sustainable competitive advantage they have as well as their ability to sustain the margins,” he said in the interview.
Caso noted Nvidia’s pricing dynamic going into 2027 on the back of its Rubin Ultra product cycle. “The whole premise of Nvidia right now is delivering value to the customers, providing more performance per watt, more performance per dollar, so that you can do more inference with the same amount of money, which folks like OpenAI surely need,” he said.
That’s where Nvidia’s competitive advantage against everyone else comes from and it’s the basis on which the analyst sees value in the company over the next two years.
Biggest Competition
Caso noted that Nvidia’s biggest competitor in the market now would be Alphabet Inc.’s (GOOG) Gemini Tensor Processing Units (TPU) because its performance is closest to Nvidia’s.
“TPU is going on its seventh generation right now. And it’s not just the chip itself, but it’s also all the networking and the systems,” Caso noted. The analyst added that at present, customers would not be impressed with chip performance alone. However, since TPU is owned by Google, Caso noted that it would be available to the entire market.
Nvidia’s edge comes from its software advantage, he said. “They’ve got the best developed software tools, not just for the big hyperscalers but for some of the Fortune 500 companies that are developing their own AI, and that software provides them with the competitive advantage that even Google can’t match.”
Earlier this week, “The Big Short” investor Michael Burry called Nvidia among the “luckiest” companies in the AI sector and said its advantage won’t last.
What Are Stocktwits Users Saying?
On Stocktwits, retail sentiment around NVDA shares dropped to ‘bullish’ from ‘extremely bullish’ territory over the past 24 hours. Message volume was at ‘normal’ levels.
Meanwhile, retail sentiment around GOOG shares was in ‘bullish’ territory amid ‘high’ message volumes.
Shares of NVDA are up nearly 40% in the past year, while shares of GOOG gained nearly 75% in the same time.
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