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Goldman Sachs isn’t scared off by the latest Nvidia (NVDA) sell-off.

Nvidia shed roughly $400 billion in market value last week after the stock fell nearly 10% on Tuesday. The tech stock was one of the biggest drivers of the S&P 500’s (^GSPC) worst start to September since 1953, according to Bespoke Investment Group, though it recovered some of its losses on Monday.

Despite the selling, Toshiya Hari, a lead analyst at Goldman Sachs, maintained a Buy rating on the chip giant. When asked if the Goldman team thought the sell-off in Nvidia stock was overdone, Hari said, “Yes, we do.”

“The recent performance hasn’t been great, but we do remain positive on the stock,” Hari told Yahoo Finance at the Goldman Sachs 2024 Communacopia and Technology Conference. “First of all, demand for accelerated computing continues to be really strong. We tend to spend quite a bit of time on the hyperscalers — the Amazons, the Googles, the Microsofts of the world — but you are seeing a broadening in the demand profile into enterprise, even at the sovereign states.”

Nvidia’s sell-off began when the company’s better-than-expected earnings print on Aug. 28 just wasn’t good enough for Wall Street. While Nvidia’s revenue beat Wall Street expectations by 4.1%, that was the smallest margin for the company since its fiscal fourth quarter of 2023.

The big debate around Nvidia is whether its earnings momentum is sustainable. Hari said that investors are questioning whether that will be the case not only for 2025 but for 2026 too.

Investor sentiment on artificial intelligence has “swung nearly 180 [degrees]” since early 2023, Goldman’s equity research team wrote in a recent note. Investors’ patience is wearing thin, and they want to be shown — not told about — AI-driven revenue streams and profit margin improvements.

Still, the Goldman team wrote, with a profound generational technology shift such as AI, “it would be futile to pass judgment based on near-term cost and return economics.”

The focus is on the long game: Goldman estimates that generative AI will begin materially contributing to sector growth by the second half of 2025.

“I think their competitive position continues to be really strong,” Hari said of Nvidia. “We do think within merchant silicon, Nvidia is the go-to, and even versus custom silicon, they’ve got the edge in terms of the pace of innovation.”

Nvidia CEO Jensen Huang is set to speak at the conference on Wednesday morning.

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