Graphics processing unit (GPU) and artificial intelligence (AI) chipmaker Nvidia (NVDA) may be approaching the end of its bull run. Shares of NVDA stock closed out trading yesterday down 1.68% and are slipping another 1.7% in pre-market trading today. While the stock is still up 166.61% year-to-date, shares have fallen 15.2% from its all-time high of $152.89 in November.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
This recent downturn could signal that shares of Nvidia have given up their recent bull rally. However, it doesn’t mean the stock will lose all of its recent gains. Instead, investors might consider its movement over the last couple of weeks as an opportunity to invest in the company’s shares before a potential recovery.
NVDA Stock: Bull vs Bear
There’s still plenty of reason to believe that Nvidia has room to run. For example, the company’s earnings performance over the last two years has been spectacular. The semiconductor company has beaten Wall Street’s EPS and revenue estimates for the prior eight quarters and there’s no sign this will change anytime soon.
On the flip side of this bull argument are bearish concerns Nvidia will lose business as its customers develop their own AI chips. Rival chipmaker Broadcom (AVGO) underwent a massive 11.21% rally yesterday on the news it’s helping some companies do just that. This could see demand for Nvidia’s chips wane as Alphabet’s (GOOGL) Google and Meta Platforms (META) reduce their reliance on the company’s processors.
Five-star Susquehanna analyst Christopher Rolland recently weighed the risks facing NVDA, including hyperscale AI capex slowdown, China shipment bans, and other potential headwinds. Even with these concerns, he has a price target of $180 for NVDA based on a P/E multiple of 45.5 of the firm’s C2025E adjusted EPS estimate. He argues this is “warranted as the company is well-positioned to take advantage of flourishing end markets.”
Is NVDA Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Nvidia is Strong Buy based on 37 Buy and three Hold ratings over the last three months. With that comes an average price target of $177.14, a high of $220, and a low of $135. This represents a potential 34.2% upside for NVDA shares.
