Despite spending much of early 2025 on a stock market downtrend, Nvidia (NASDAQ: NVDA) continues to command investor confidence and optimism.
The psychological momentum it boasts appears only logical, as the year-to-date (YTD) 11.44% drop to $118.94, despite its severity, remains dwarfed by the 900% rally between November 2022 and the end of 2024.
However, the question of whether NVDA shares are a buy, sell, or hold in March 2025 is becoming increasingly pointed as the most recent trading – despite some upward volatility – has been increasingly negative.
Picks for you
Wall Street weighs in on the future of Nvidia stock…
To begin with, Wall Street remains optimistic about the semiconductor giant despite the stock market turmoil and, on average, expects the equity to rally 51.23% to $174.79 in the coming 12 months, based on the data Finbold retrieved from TradingView on March 14. Notably, none of the 67 represented analysts opted for a sell rating for NVDA.
Optimism, albeit tempered, is observable in the third month of 2025 despite the growing fears of a looming financial crisis and some experts’ positing that the U.S. is already in a recession.
Since the start of March, four institutions – Bernstein, Mizuho, Phillip Securities, and President Capital – have reevaluated their NVDA stock ratings, and all four have concluded that the shares are still a ‘buy.’
Still, the overall rating was overwhelmingly accompanied by price target downgrades. Mizuho – the latest to reassess its position – settled for $168 instead of the previous $175, President Capital for $165 instead of $175 as it forecasted before, and Phillip Securities was the most pessimistic, as it now hopes for a rally to $130, not $160.
Why Nvidia’s business strength remains unquestioned
Nvidia’s performance firmly backs the persistent bullishness. Indeed, the company has been enjoying strong growth in recent years, and its earnings reports have consistently outperformed analyst forecasts.
Another example of Nvidia’s strength – and continued growth potential – is the figure showcasing the semiconductor giant’s revenue per employee.
Specifically, it is estimated at $3.6 million per worker – higher than any other big tech firm and $1.2 million above Apple (NASDAQ: AAPL), the second company on the list – per a late February Sherwood News report.
While there is little room to question Nvidia’s strength, profitability, and growth potential overall, the firm’s exceedingly high valuation – towering above $2 trillion – is a point for concern.
…but NVDA shares’ high valuation is a concern
Compared with the other two major chipmakers – Advanced Micro Devices (NASDAQ: AMD) and Intel (NASDAQ: INTC) – Nvidia appears exceptionally overvalued, given the substantially smaller difference in metrics such as revenue.
On March 13, Finbold estimated that, assuming that AMD is fairly valued, a market capitalization of approximately $900 billion would be more appropriate, given the scale of Nvidia’s business. Should it be reached, NVDA could collapse by more than 50%.
Simultaneously, if Nvidia is, in fact, at a stable and fair valuation, AMD might be a stronger buy as matching NVDA’s size in relative terms would see it enjoy a triple-digit rally.
Nvidia’s exceptionally high valuation is largely due to its positioning within the artificial intelligence (AI) boom and optimism about future growth.
A recent rise in competition from China has called such a narrative into question. Should the People’s Republic be close to making or unveiling more breakthroughs akin to DeepSeek’s R1 model, the Manus AI agent, or the ‘quantum supercomputer,’ the dominance of Nvidia and the entire Silicon Valley could be questioned.
Could the escalating trade war collapse Nvidia stock price?
Simultaneously, as a company operating in a highly advanced sector, Nvidia relies on materials and equipment sources via the global trade and supply network.
A Dutch company, ASML (AMS: ASML), is responsible for the foundational equipment for making semiconductors, while the majority of actual chip manufacturing is done in Taiwan.
Both areas are being affected by President Donald Trump’s trade war, and any disruptions could, at the very least, reduce Nvidia’s profits.
It goes without saying that a recession could prove devastating for a stock that is so dependent on future growth to maintain its high value.
Featured image via Shutterstock
