Jefferies analyst Mark Lipacis reiterated a Buy rating and $38 price target on NVIDIA (NASDAQ: NVDA) telling clients to buy the stock ahead of January quarter results after the close today.

Lipacis commented, "While there is a risk of an "air-pocket" this year in front of its next-gen GPU platform, Pascal (est mid-16), we think the 18% YTD decline (vs 11% for the SOX) discounts a lot of bad news. Near term, we believe GPUs saw ASP strength, longer term we view NVDA's stock as a call option on 4 secular trends: Virtual Reality, PC-Gaming, Semis in Autos, GPUs in the Cloud. We view the YTD weakness as a particular opportunity."

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Shares of NVIDIA closed at $26.99 yesterday.