Is there trouble ahead for Nvidia (NASDAQ:NVDA)? The chip stock has had things all its own way for quite some time now, and looked like it would be a major part of everything from AI to gaming graphics for the foreseeable future. And it’s actually up over 2% in Wednesday afternoon’s trading, despite recently seeing shares falter below what one analyst considered a major milestone level.
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The latest word out of BTIG noted that Nvidia managed to fall through the $400 price mark at one point, which BTIG reckoned as “key support.” By falling past the $400 mark, if only briefly, BTIG believes that there could be as much as another 10% further downside to come. Granted, Nvidia won’t be reporting its earnings until just ahead of Thanksgiving, but based on BTIG’s report, Nvidia is having trouble keeping up against a complete “multi-month distribution pattern.” What’s more, BTIG also noted that the VanEck Semiconductor ETF (NASDAQ:SMH) has also broken its 200-day moving average, suggesting that there might be weakness throughout the chip sector.
Weakness in the chip sector may not be out of line. After all, a report from Medallia noted that holiday shoppers expected to spend more this holiday season, but on fewer gifts. Given the rampant state of inflation these days, that’s a projection not out of line. That in turn may mean that demand for chips will weaken accordingly. And it also doesn’t help that Nvidia may be in line to lose a whopping $5 billion worth of orders slated for China. Particularly those H800 chips, originally made for export that were recently addressed by new rules. A modified version that meets the law may turn that around, but the question of how long it will take to make a new for-export chip remains.
What is the Prediction for Nvidia Stock?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on NVDA stock based on 37 Buys and one Hold assigned in the past three months, as indicated by the graphic below. Furthermore, the average NVDA price target of $645.53 per share implies 53.77% upside potential.
