Nvidia (NASDAQ: NVDA) slipped further on Tuesday, September 16, continuing the downwards trend after China’s State Administration for Market Regulation started an antitrust investigation into its $7 billion acquisition of Mellanox Technologies in 2020.
Reports also suggest Beijing pressured the chipmaker to halt production earlier this summer over security concerns, although CEO Jensen Huang has denied the chips have “any security backdoors.”
The news comes as NVDA trades at $176.44, down 3.06% in the past month from the August all-time high (ATH) of $184.48.
Wall Street still optimistic
Wall Street remains broadly bullish given the company’s dominant position on both hardware and software fronts, suggesting the dip is viewed as a buying opportunity rather than a setback.
For instance, KeyBanc’s John Vinh argued that Nvidia’s CUDA ecosystem remains a “significant barrier to entry,” reiterating his “Overweight” rating with a $230 price target.
Similarly, DA Davidson analyst Gil Luria who had been less than impressed with the AI chipmaker since initiation coverage on NVDA stock as early as 2024 upgraded his rating from “Neutral” to “Buy” on Monday, September 15, lifting Nvidia’s price target from $195 to $210 after claiming just months ago that the stock could plunge nearly 50%.
Valuations are also in Nvidia’s favor, as it trades at about 40x forward earnings, versus, for example, Broadcom’s (NASDAQ: AVGO) 53x.
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