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The brutal selloff in AI-chip stock Nvidia<\/a> offers investors an attractive entry point, Goldman Sachs<\/a> argued on Monday.<\/p>\n Founder and CEO Jensen Huang has seen his company lose 17% of its market cap since issuing muted third-quarter guidance that sparked concerns its rapid earnings growth may not be sustainable. Only a\u00a0handful of companies<\/a>\u00a0are currently fueling its booming AI chip business, with just four customers constituting nearly half of all Nvidia\u2019s revenue.\u00a0<\/p>\n Speaking with Yahoo<\/a> Finance on the sidelines of a tech conference hosted by his bank, Goldman Sachs semiconductor analyst Toshiya Hari remained confident sales will pick up as customers outside of the three cloud hyperscalers\u2014Amazon<\/a>, Microsoft<\/a>, and Google\u2014start to invest in their own AI compute clusters.<\/p>\n \u201cDemand for accelerated computing continues to be really strong,\u201d he said on Monday, reaffirming his \u201cbuy\u201d recommendation on the stock and arguing the stock was oversold. \u201cYou are seeing a broadening in the demand portfolio into enterprise, even into sovereign states<\/a>.\u201d<\/p>\n Based on Hari\u2019s estimates for Nvidia\u2019s 2025 profits, Nvidia\u2019s price-to-earnings multiple is in the low 20s thanks to the\u00a0sharp pullback<\/a>\u00a0over the past couple of weeks. By comparison<\/a>, Tesla<\/a> trades at 77 times next year\u2019s consensus earnings estimates, according to Yahoo Finance.<\/p>\n Nvidia has driven this year\u2019s gains in the S&P 500 index, but lately it has become a victim of its own success.\u00a0<\/p>\n A combination of\u00a0production bottlenecks<\/a>\u00a0and a\u00a0lack of meaningful competition<\/a>\u00a0means customers are waiting to be allocated supply of Nvidia\u2019s Hopper AI training chips. Those that are able to actually get their hands on this prized resource are paying through the nose, causing profit margins at Nvidia to balloon.<\/p>\n Unhappy with the lack of choice, tech companies\u2014including Amazon and Tesla\u2014are developing their own custom silicon rather than depending entirely on Nvidia. These proprietary chips can be fabricated at specialized foundries like Taiwan Semiconductor Manufacturing<\/a> Co. (TSMC), bypassing Nvidia entirely.\u00a0<\/p>\n Hari acknowledged barriers are dropping when it comes to the make-or-buy question, but argued the threat is overblown.<\/p>\n\nCustom silicon the latest trend among chip-starved Nvidia customers <\/h2>\n