Nvidia (NVDA) stock has made an impressive recovery this week, bouncing back from a two-week slump that had wiped out over 20% of the advanced chipmaker's market value. Despite some recent turbulence, analysts remain bullish on the stock, citing strong demand for Nvidia's AI-enabled chips.

Investors responded positively to analysts' recommendations and bought the dip, allowing Nvidia stock to recover most of its losses from previous weeks. As of midday Friday, the stock was little changed, but had surged nearly 16% for the week, marking one of the best weeks of the year for Nvidia shares. This second massive rebound comes in the midst of a volatile month for the chipmaker's stock.

The boost in Nvidia shares earlier this week can be attributed to CEO Jensen Huang's positive remarks about the company's products and market opportunities at a Goldman Sachs conference. Huang emphasized the incredible demand for Nvidia's products and expressed optimism about the expansion of AI into various sectors, highlighting that generative AI is not just a tool but a skill with vast potential.

Although Nvidia faced a significant sell-off in early August due to reports of delays in their next-generation Blackwell system caused by a design flaw, analysts believe these delays are unlikely to have a substantial impact on quarterly sales. This is because the demand for Nvidia's chips remains remarkably strong, with cloud hyperscalers such as Microsoft, Amazon, and Alphabet increasing their AI infrastructure spending, a significant portion of which goes towards Nvidia chips.

Furthermore, Tesla CEO Elon Musk estimated that his company would spend between $3 and $4 billion on Nvidia's chips this year, accounting for up to 40% of their total AI spending. Such high demand has played a crucial role in maintaining analysts' confidence in Nvidia, with Bernstein analysts reiterating their endorsement of Nvidia as one of their top semiconductor picks, stating that it is "the best way to play AI."

Despite concerns about sustainability due to the rapid rise in Nvidia's numbers, analysts from Bank of America Securities see the recent pullback in Nvidia stock as an enhanced buying opportunity. Of the 63 analysts tracking Nvidia, 50 have given it a "Buy" rating, with none recommending selling the stock.

While uncertainties may persist in the market sentiment regarding AI stocks, Nvidia's rebound, driven by strong demand, serves as a testament to the chipmaker's robust business. With analysts still highly positive about its future prospects, Nvidia seems poised to continue capitalizing on the ever-growing AI market.