After an incredible run in recent years, Nvidia Corporation (Nasdaq: NVDA ) stock is up another 32 percent in 2018. The latest data from Bank of America suggests hedge funds aren't buying Nvidia, but analyst Vivek Arya says that trend is good news for Nividia investors.

Bank of America's latest fund holding data from July indicates fund managers are bullish on the semiconductor boom but not quite sold on NVDA stock . Semiconductor stocks currently have a 1.1x weighting among fund managers relative to their weighting in the S&P 500 index. At the same time, semiconductor stocks are modestly underweight relative to the rest of the technology sector. Arya says neither of these trends changed much in July.

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In the past three months, fund weighting of NVDA stock had declined by 4 percent to 0.89x relative to its weighting in the S&P 500. As of July, 28 percent of fund managers own NVDA stock, up 1.15 percent in the past three months.

Popular semiconductor stocks Intel Corp. ( INTC ) (0.86x weighting) and Advanced Micro Devices ( AMD ) (0.17x weighting) are also underweighted by fund managers.

Arya says the lack of respect for Nvidia is a bullish contrarian indicator.

"We consider the 28 percent ownership still quite low relative to other larger-cap semis that are owned by 30 to 35 percent of fund managers or large-cap growth tech stocks that are owned by 40-plus percent of managers," Arya says.

Arya says Nvidia is demonstrating some extremely encouraging trends in the red-hot gaming market, and Nvidia's next-generation Volta/Turing gaming cards could be coming as soon as the Gamescom conference on Aug. 21.

Arya estimates 73 percent of Nvidia card users are ready for upgrades and says Wall Street doesn't seem to appreciate the upside Nvidia's gaming business can provide in 2019.

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Bank of America's latest Steam data indicates 74.3 percent of gamers currently use Nvidia cards compared to only 15.1 percent who user AMD cards. Arya estimates Nvidia's gaming business can support at least 20 percent annual revenue growth in the long-term.

"In our view, NVDA is uniquely positioned to address some of the largest and fastest-growing parts of technology, including gaming, artificial intelligence, deep learning, self-driving cars and virtual reality," Arya says.

Bank of America has a "buy" rating and $340 price target for NVDA stock .

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