Bank of America analyst Vivek Arya has forecasted a potential 11% pullback for Nvidia's stock after the company's earnings report on February 21st. Arya emphasizes that while the stock has recently experienced a rapid rise in value, it may face a significant decline following the upcoming earnings announcement. Currently, Nvidia's stock is valued at about $740 as of Friday afternoon.

Arya warns that the bullish expectations from investors could dampen Nvidia's ability to exceed consensus estimates, leaving the firm susceptible to an implied 11% post-earnings move. He believes any potential decline would be temporary and attributes it to supply-side factors rather than shifts in demand or competition.

The Bank of America analyst further notes that Nvidia's upcoming GPU Tech Conference in mid-March is expected to provide a boost to the stock. Historically, following previous GTC events, Nvidia's stock has shown positive movement, averaging 6% higher compared to the S&P 500 index.

Despite the potential for a pullback, Arya reaffirms Nvidia's strong position in the market, with a valuation of 35 times its price-to-earnings ratio, below its median. He also highlights the company's compliance with US regulations aimed at restricting chip shipments to China, a move that has allowed Nvidia to realign its semiconductor products for the Chinese market.

Wall Street continues to show confidence in Nvidia, with notable investors like Ray Dalio, Paul Tudor Jones, and Stanley Druckenmiller increasing their exposure to the chipmaker. Whether the predicted pullback materializes or not, the love for Nvidia among investors remains evident as the company prepares to disclose its financial results later this month.