Nvidia (NASDAQ:NVDA) stock has witnessed a pullback recently. For context, NVDA stock has lost over one-third of its value in the past three months. Meanwhile, it is down about 27% this year alone.
Profit-taking, valuation concerns, and general selling in the market amid the Russia-Ukraine crisis could be blamed for the decline in Nvidia stock.
However, is this pullback an investment opportunity?
Digging Deeper
Nvidia continues to deliver stellar financial results on the back of the continued strength in its end markets. Further, the ongoing momentum in the Data Center and Gaming sectors provides a solid base for future growth.
Highlighting its strong growth prospects, Rajvindra Gill of Needham stated that the company “is on track to grow at least ~40% in FY23.” Further, NVDA “has excellent visibility into both demand, especially on the data center side, and supply.”
Gill noted that the pullback in NVDA stock has led to a compression in its valuation, and thus he reiterated his Buy rating.
While Gill is bullish, Toshiya Hari of Goldman Sachs initiated coverage on NVDA with a Hold recommendation. Hari expects Nvidia to benefit from strong demand trends. However, Hari sees risk/reward fairly balanced at current levels.
Moreover, Summit Redstone Partners analyst Kinngai Chan recently downgraded NVDA stock to a Hold. The analyst sees lower demand from the crypto mining market and a less favorable risk/reward scenario.
NVDA Price Forecast
In general, analysts are bullish on Nvidia shares, thanks to its strong growth prospects. It sports a Strong Buy consensus rating based on 17 Buy and 4 Hold recommendations.
Moreover, NVDA’s stock price forecast on TipRanks shows solid upside potential due to the pullback in price. The average Nvidia price target of $352.65 implies 63.9% upside potential to current levels.
While Wall Street is bullish on NVDA, hedge funds also maintain a positive outlook. Per TipRanks’ Hedge Fund Trading Activity tool, hedge funds added 1.3M Nvidia shares over the last quarter.
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