**Nvidia's Prospects Bolstered by AI Investments Despite Recent Setbacks**

Nvidia's growth prospects remain strong heading into next year, buoyed by continued investments in AI compute from hyperscale customers. This is despite production setbacks that have plagued the tech giant. DA Davidson analyst Gil Luria noted the company's resilience but also highlighted potential risks, such as an AI bubble and reliance on a handful of Big Tech customers. After Nvidia's third-quarter earnings report, Luria increased his price target for the stock from $90 to $135, maintaining a Neutral rating.

JPMorgan analyst Harlan Sur reaffirmed a Buy rating on Nvidia shares, raising his price target from $155 to $170, citing sustained demand for Nvidia's Hopper chips. Like Sur, William Stein of Truist Securities also keeps a Buy rating, commending Nvidia for its innovation and significant investments in software and pre-trained models. Nvidia's shares, however, dipped about 1% on Thursday despite a slight recovery by the market close. Analysts linked this to the company's conservative guidance for the current quarter. Stein argued that confidence in the Blackwell chip ramp could offset any negative investor sentiment.

Earlier in the year, Nvidia faced delays in the production of its new Blackwell AI chips due to design flaws. Recent reports about overheating issues in servers equipped with these chips caused further concern, temporarily impacting the stock. Nonetheless, analysts like Mark Lipacis of Evercore ISI dispelled these worries. Nvidia reaffirmed that Blackwell production is on track, with anticipated shipments now expected to exceed prior forecasts.

Adding to the uncertainty, Nvidia has also faced pressures from potential changes in trade policies, given its significant sales to China, which accounted for 14% of its data center revenue in the fiscal year ending January 28, 2024. While the impact of tariffs remains a concern, experts like 'Chip War' author Christopher Miller believe that the semiconductor sector will not be severely affected directly by these trade issues.

Despite these challenges, Nvidia is expanding beyond AI compute markets. According to Voltron Data’s field chief technology officer Rodrigo Aramburu, Nvidia is strategically positioned in various sectors, not just AI. William Stein of Truist Securities also noted the anticipated release of Nvidia's consumer CPU next year, which could significantly broaden the company's addressable market.