Among the Magnificent Seven stocks, Nvidia (NASDAQ: NVDA) ended the last trading session with significant losses as investors continued to digest the company’s third-quarter earnings report.
The stock began the day targeting a new all-time high but closed at $141.95, down 3.22%. Since the earnings report, NVDA has experienced volatility but remains in the green on the weekly and year-to-date charts at 2.69% and 194%, respectively.
Why Nvidia stock is down
Nvidia corrected even as the artificial intelligence giant posted better-than-expected earnings. The company reported $35.1 billion in revenue, beating expectations of $33.2 billion, with earnings per share at $0.81 compared to $0.75 expected.
Picks for you
However, investors turned cautious as analysts raised concerns about the chipmaker’s guidance for the coming quarters.
For instance, Bernstein’s Stacy Rasgon noted that the forecast was slightly below the bullish expectations, adding that it was “perhaps a touch below some of the more bullish whispers.”
He maintained an optimistic outlook for the company, citing an improved Blackwell Q4 forecast, noting that the projections are conservative and may pave the way for further gains.
At the same time, Phillip Securities analyst Yik Ban Chong downgraded Nvidia stock from ‘Buy’ to ‘Accumulate’ on November 22. Chong expressed concerns about the anticipated lower initial margins for the Blackwell chip series. Despite the downgrade, he raised his target price to $160 from $155.
Interestingly, concerns have surfaced about Blackwell chip delays and overheating. Nvidia dismissed these during its Q3 report, confirming that production is on track.
Similarly, there are emerging red flags that Nvidia might have reached its peak following a massive run in 2024, which has pushed its market cap to over $3 trillion.
In this regard, Blue Chip technical analyst Larry Tentarelli pointed out that this growth could mean NVDA might lose its position in the AI space to other lower-valued players.
Wall Street bullish on Nividia
Other analysts maintain a bullish stance, predicting the stock could rise further due to its role in AI. Melius Research’s Ben Reitzes, who kept a ‘Buy’ rating on Nvidia, downplayed worries about supply constraints.
“How many times do you hear Nvidia is too big and what goes up must come down? Which stock would you rather own today? You want a company in tech who is not going to complain about seasonality near-term? Check. Want the only mega-cap in tech growing over 50% next year? Check. No wonder this stock is being bought on dips – can you afford not to be overweight?” he posed.
Additionally, on November 21, Rosenblatt’s Hans Mosesmann raised his price target to $220, maintaining a Buy rating. Benchmark’sBenchmark’s Cody Acree also reiterated a ‘Buy’, increasing his target to $190.
Nvidia stock’s other fundamentals
Beyond the impressive Q3 report, Nvidia is showing further growth potential, considering the chipmaker highlighted growing demand beyond U.S. clients.
For instance, Denmark’s first AI supercomputer will run on Nvidia’s Hopper chips—a big win for the company. This suggests Nvidia has potential for growth in sales as governments seek to establish AI systems.
While Nvidia is showing short-term weakness, there’s little reason for concern right now, as the price movement could reflect market sentiment outpacing results rather than fundamentals.
Featured image via Shutterstock
