Advanced Micro Devices (AMD) and Nvidia (NVDA) have each had wild rides in 2018. Both stocks were up big in the first nine months of the year — AMD nearly 200%, while Nvidia grew more than 40% — before each plummeting over the past 10 weeks. Investors have quickly fled each company — and the chip market in general — over fear of slowing demand amid the crypto-bubble burst. But Mizuho analyst Vijay Rakesh remains bullish on both chip giants, though he has decreased AMD’s price target to $30 (prior $33) and Nvidia’s to $230 (prior $245).

Before we go into details, as usual, we like to include the analyst’s trackrecord when reporting on new analyst notes. According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, 5-star analyst Vijay Rakesh has a yearly average return of 19.2% and a 56% success rate. Rakesh has an 8.6% and 62.6% average return when recommending AMD and Nvidia, respectively, and is ranked #76 out of 5,108 analysts

Rakesh sees “price stabilization in both NVDA’s newly released RTX 2070/80, and AMDs VEGA lineup, which we consider positive as GPU demand remains intact.” Demand is a main concern among investors right now, but the analyst says price stabilization is evidence that the demand is still there, though perhaps not increasing. Rakesh adds, “NVDA/AMD should also benefit from GPU/gaming sales ahead of Chinese New Year,” which is at the beginning of February.

For demand, Rakesh notes that “Taiwan GPU motherboard suppliers (are) trending better than (last year),” and says that if Gigabye and MSI can “post December revenue growth in the range of their historical 5-year averages (MSI down ~7%, Gigabyte down ~12%), we could see DecQ’18 q/q growth trending ~5-10% better than DecQ’17, a positive sign for GPU demand and AMD/NVDA.”

While Rakesh is not changing his NVDA estimates, he is adjusting AMD to “reflect slightly weaker semi-custom, offset by continued PC and better server trends.” The analyst says, “new product launches should be a tailwind.”