Shares of semiconductor manufacturer Nvidia Corp. (NVDA) are soaring on Tuesday following an upbeat report from one team of analysts on the Street who view recent weakness as an opportunity to buy shares of the chip stock at a discount, as outlined by Barron's. 

Chip Maker's Long-Term Growth Opportunities Outweigh Near-Term GPU Weakness

In a note to clients on Tuesday, JPMorgan analyst Harlan Sur upgraded shares of the Santa Clara, Calif.-based tech company from neutral to overweight. His new 12-month price target, down from $265 to $255, implies a 37% upside from Monday close. 

Sur cited Nvidia stock's underperformance compared to the iShares PHLX Semiconductor ETF's (SOXX) in October, with the former down 36% and the latter down 17%. The Street has become increasingly bearish on the chip sector, with analysts at firms including Morgan Stanley and Goldman Sachs citing deteriorating fundamentals and the onset of an industry-wide down cycle. 

Despite broader fears, Sur views the Street's pessimism on Nvidia stock as overblown, indicating that his peers aren't taking into account the chip maker's longer-term opportunities in a handful of secular growth markets. 

Sur did acknowledge challenges facing Nvidia's GPU business in the near-term, yet expects the firm to continue to benefit from outsized growth and clear leadership in data center/HPC and gaming over the next few years. 

"We believe the company’s HPC [high-performance computing] /professional visualization/datacenter momentum remains strong as new compute workload acceleration (AI/Deep Learning, Analytics, etc.) penetration remains solid," wrote the JPMorgan bull. 

In particular, Sur highlighted the autonomous vehicle space as a positive tailwind for Nvidia, which he dubbed an "emerging frontrunner" in the sector, as well as secular growth trends in e-sports and the release of at least 30 new games, which should hedge against weakness in gaming caused by an inventory glut. 

Trading up 6.2% at $197.09 on Tuesday afternoon, Nvidia stock reflects a 1.9% gain YTD, compared to the iShares PHLX Semiconductor ETF's (SOXX) 6.5% decline and the S&P 500's 0.4% loss over the same period.