the case to buy nvidia just got even more compelling according to bank of america analyst vivek arya named nvidia a top pick saying in a tuesday note that chip stocks are already pricing in a recession even as they generate better free cash flow margins than stocks in the broad market index while macro factors can enhance stock volatility we believe the recent 36 peaktrough pe multiple contraction in the sox index vs 27 downturn historically already reflects a mediumsized recession arya wrote meanwhile chip stocks are generating 23 fcf margins 2x more profitable than s  p 500 stocks and trading at compelling 22x cy22 evfcf which is below r1k value stock multiples bank of america has a 270 price objective assigned to nvidia the price target implies nearly 45 upside from tuesdays closing price nvidia shares are down nearly 37 year to date additionally bank of america believes that nvidia services the most resilient industries including cloud computing and artificial intelligence industrial electric vehicle and driverless technology sectors in prior times only a single endmarket say pcs or smartphones would drive semis now there are multiple endmarkets served by a consolidated set of chip vendors delivering proprietary products and generating solid fcf margins arya wrote stronger pricing and more flexible hybrid manufacturinguse of outsourced foundries could also help reduce gross marginfcf volatility of semis in the next inevitable downturn he added chip stocks could also get a boost after china lifts some covid restrictions which could reenergize investor interest in the sector arya said —cnbcs michael bloom contributed to this report