Semiconductor stock Nvidia Corp. (NASDAQ:NVDA) has been on a swift uptrend thanks to its fast-paced artificial intelligence (AI) developments. In fact, NVDA stock has ballooned by 195% this year. However, the past five trading days have been rather dull, with the stock down slightly. This brings us to the following question — is Nvidia stock’s rally over?
Corporate Insiders Are Selling the Stock
The company’s corporate insider trading activity at least signals that. As per the latest regulatory filing, Director Mark A Stevens sold 118,602 shares of NVDA at an average price of ~$431 for a total consideration of over $51 million.
Moreover, the TipRanks Insider Trading Activity tool shows that the Insider Confidence Signal on NVDA is Very Negative, with corporate insiders selling $193 million worth of shares in the last three months. The tool highlights that insiders may not be too optimistic about NVDA’s future trajectory and are taking advantage of the current rally.
Here’s What Analysts Say About Nvidia Stock
Yesterday, Mizuho Securities analyst Vijay Rakesh reiterated a Buy rating on NVDA stock but set a price target of $400, which implies 5.4% downside potential from current levels. Rakesh believes that Nvidia is currently trading at steep multiples. Having said that, recovering demand for personal computers (PC), chip demand for gaming consoles, chip requirements in the Automotive and Data Center segments, and AI tailwinds position it well for upside.
Even so, growing competition, reliance on third-party manufacturing, and pricing pressures are probable headwinds that could limit its stock’s trajectory. His price target of $400 reflects a 50.5x Fiscal 2025 price/earnings per share (P/E) multiple based on his estimates, which is within NVDA’s historical valuation.
Overall, too, analysts are bullish about Nvidia and have awarded the stock a Strong Buy consensus rating. This is based on 30 Buys and three Hold ratings on TipRanks. Also, the average Nvidia price target of $464.85 implies 9.7% upside potential from current levels.
Bottom Line
Although corporate insiders and Wall Street analysts have differing views on Nvidia stock, there is no denying the fact that the burgeoning generative-AI technology market is set to bolster demand for chips. Nvidia is indeed well-positioned to capitalize on the demand, and its shares could witness more upside in the long run as a result.
