![Barclays says sell NVIDIA bonds as risk is to the downside](https://i-invdn-com.investing.com/news/LYNXMPEE0U1G1_L.jpg)
© Reuters. Barclays says promote NVIDIA (NVDA) bonds as danger is to the draw back
Barclays analysts began NVIDIA (NVDA) bonds at Underweight in a analysis notice to purchasers on Tuesday.
The analysts advised buyers that they imagine NVDA’s valuations totally value within the AI GPU progress ramp, and so they anticipate demand progress to finally reasonable because it strikes from coaching into the inference section.
“While we acknowledge that demand for Nvidia (NASDAQ:)’s advanced GPUs remains unabated, we are taking a view on the long-term sustainability of this demand as well as how the market is pricing this anticipated growth in NVDA bond spreads,” defined the analysts.
“NVDA bonds are some of the tightest trading in the market, trading tighter than AAA/AA+ rated Microsoft/Apple, leaving little room for further tightening,” they added. “As opposed to MSFT/AAPL, NVDA’s AI technology and demand curve still needs to be proven beyond doubt.”
Barclays sees NVDA seemingly dealing with significant competitors from hyperscalers’ personal silicon, AMD, and probably INTC. “We think [the] risk to NVDA bonds is to the downside,” added the analysts.
The financial institution recommends “selling NVDA 3.5% 2050s (54bp, $82) and buying AMD 4.393% 2050s (71bp, $93) to pick 17bp of spread while paying $11 points and moving into a future AI GPU share-gainer.”