On Tuesday, Nvidia Corp (NASDAQ:NVDA) stock traded lower as investors resorted to profit booking. The stock gained 193% in the last 12 months, backed by the artificial intelligence frenzy.

Analysts, including Wedbush Securities analyst Matt Bryson and Oppenheimer analyst Rick Schafer, hailed Nvidia as the critical AI play.

Apart from AI, Nvidia continues to target gaming technology by introducing its first digital human technology small language model, Nemotron-4 4B Instruct.

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The innovation will likely transform the gameplay experience by enhancing character interactions in the new multiplayer mech game Mecha BREAK, developed by Amazing Seasun Games, a subsidiary of Kingsoft Cloud Holdings (NASDAQ:KC).

The technology is optimized for GeForce RTX AI PCs and laptops, making it easier for developers to deploy advanced digital human technology in next-generation games like Mecha BREAK.

Nvidia has also unveiled a generative AI weather model that promises to revolutionize short-range weather forecasting. The new model, StormCast, marks a significant leap forward in predicting extreme weather events, such as flash floods and tornado outbreaks, with greater accuracy down to the kilometer scale, Axios reports.

Nvidia’s StormCast can operate at the mesoscale level, which allows it to resolve small-scale weather systems and incorporate complex atmospheric physics, such as how thunderstorms form, intensify, and dissipate.

Analyst Rating: Oppenheimer analyst Rick Schafer reiterated an Outperform rating on Nvidia with a price target of $150.

Nvidia trades at 29x calendar year 2026 versus the five-year average of 36x. Schafer flagged the company’s best-in-group gross and operating margin profile.

Nvidia remains the purest scale play on AI proliferation. Schafer said Data Center AI leads sustained structural growth as accelerator attach increases.

He noted that Nvidia’s entrenched DC AI ecosystem is core to GenAI adoption. Schafer remains a long-term buyer.

Schafer expects an upside for second-quarter results and third-quarter outlook, led by sustained cloud service providers (CSPs) and enterprise AI demand.

The lead times have normalized despite the tight supply, which is gated by advanced packaging capacity. The B100 is on track for a low-volume fourth-quarter market introduction with a meaningful ramp in the first quarter as Chip-On-Wafer-On-Substrate-L (CoWoS-L) supply improves.

The analyst expects Hopper to fill demand in the interim. Blackwell Ultra is anticipated by late fiscal 2025, Ruben+Vera due fiscal 2026, and Ruben Ultra by fiscal 2027.

The move to rack-scale leveraged Nvidia’s unique end-to-end software connectivity accelerator platform. The analyst noted that GB200 NVL36 and GB200 NVL72 racks further separate Nvidia from the competition.

Schafer projects second-quarter net sales and EPS of $28.04 billion and $0.62.

Price Action: NVDA stock traded lower by 1.50% to $128.08 at the last check Tuesday.

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Image via Nvidia Blog