Shares of chipmaker Nvidia (NVDA) are down at the time of writing as investors remain worried about AI demand. The decline puts Nvidia shares down nearly 17% on a year-to-date basis, with the company experiencing its worst monthly performance in February since July 2022. Analysts are pointing to growth fears, as well as supply chain issues and regulatory risks, as reasons why the stock has been underperforming. Interestingly, five-star Bernstein analyst Stacy Rasgon noted that “sentiment has clearly pivoted” for the AI group.
Separately, Futurum Group analyst David Nicholson told Yahoo Finance that “Wall Street is catching up to the reality that Nvidia will not create a decades-long dynasty like Intel once did.” Indeed, competition from multiple directions is negatively impacting investors’ outlook for Nvidia. Furthermore, industry news — such as CoreWeave losing business from Microsoft (MSFT) and Marvell Technology’s (MRVL) disappointing quarterly results — has not helped at all.
As a result, other AI-related stocks saw similar drops as investors reprice the hype surrounding artificial intelligence. With big tech planning to invest over $300 billion in AI during 2025, some analysts are questioning whether or not such investments are sustainable without positive returns. In fact, Nicholson noted that “some people are taking a deep breath and asking the question, ‘How long can we sustain this level of investment without positive ROI?'”
Is NVDA a Good Stock to Buy?
Overall, analysts remain bullish on NVDA stock, with a Strong Buy consensus rating based on 39 Buys and three Holds assigned in the past three months. Furthermore, the average NVDA price target of $177.41 per share implies an upside potential of 58.6% from current levels.
