Analysts typically consider a range of factors when revising stock forecasts, including Nvidia’s strides in AI technology, its expanding footprint in data centers, and the growing demand for its GPUs within AI and machine learning applications.
Upward revisions in recent months have reflected Nvidia’s strong positioning in the AI chip market, with innovative products like the H100 Tensor Core GPU enhancing its competitive edge.
As industries continue adopting AI-driven solutions, demand for Nvidia’s hardware shows no signs of slowing, fueling an overall bullish sentiment among many analysts.
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However, on October 30, 2024, Punto Research downgraded Nvidia Corporation (NASDAQ: NVDA) from a ‘Hold’ to a ‘Sell,’ setting a target price of $126.70.
Why Nvidia was downgraded to a ‘Sell’
The price target highlights concerns about Nvidia’s current valuation and potential market challenges, as reported on market screen platforms. With Nvidia closing at approximately $132.76 on October 31, this downgrade implies a potential downside of about 4.6% based on Punto Research’s target.
This downgrade stands in contrast to recent analyst perspectives that have generally maintained a positive outlook on NVDAs growth trajectory.
In response to the recent downgrade, some onlookers raised questions about Punto Research’s (Punto Casa de Bolsa) credibility, with one stock trader commenting, “Who the heck is ‘Punto Casa de Bolsa’? Never heard of this group or analyst firm. Downgrading $NVDA? I am sure that is fine.”
As of now, Nvidia’s stock has been fluctuating within the $121.83 – $144.42 range, currently sitting near the midpoint. Key resistance levels can be observed between $140.07 and $143.72, influenced by several trend lines and critical moving averages across time frames.
Support may be found at $118.11, according to horizontal patterns on the daily chart. As such, while the stock remains stable, these resistance and support levels could play a role in its near-term movement, especially amid mixed market sentiment.
Finally, Finbold reached out to Punto Casa de Bolsa for further clarification on the rationale behind the downgrade; however, no response has been received at the time of publication.
