02:43 PM EST, 02/26/2026 (MT Newswires) -- Nvidia's ( NVDA ) post-earnings stock selloff likely reflects factors including ongoing fears around artificial intelligence as markets monitor an expected tough set-up for cloud capital spending, BofA Securities said in a note emailed Thursday.

Shares of the technology bellwether declined 5% after midday Thursday, wiping out gains for this year.

Late Wednesday, the chipmaking giant reported fiscal fourth-quarter results above Wall Street's estimates as an AI boom continued to fuel computing demand. At the same time, it issued a stronger-than-expected revenue outlook for the ongoing quarter.

The post-earnings market reaction likely reflects continued concerns around AI disruptions and greater upside from networking than compute, BofA analyst Vivek Arya wrote. In addition, there were no updates on the $500 billion data center revenue opportunity the company shared last year.

Arya, however, views this as short-term noise, saying the stock presents a "compelling valuation."

Cloud capital spending is expected to face a tough comparison in 2027, after growing more than 50% annually from 2024 to 2026, Arya said.

Morgan Stanley separately flagged cash flow pressure at hyperscalers, raising questions about spending sustainability.

Nvidia ( NVDA ) "more than delivered" on its fourth-quarter performance and is poised to accelerate growth amid demand visibility, Arya said. BofA lifted its price target on Nvidia ( NVDA ) shares to $300 from $275, while reiterating its buy recommendation.

The brokerage raised Nvidia's ( NVDA ) earnings-per-share and revenue estimates from fiscal 2027 to 2029.

With supply commitments surging to $95 billion, Nvidia ( NVDA ) "may well be the most dependable supplier that can serve the AI market that we believe could double towards $1.4 (trillion) in the next few years," Arya said.

Price: 186.45, Change: -9.18, Percent Change: -4.69