Wall Street's main indexes fell on Tuesday as Treasury yields rose following hotter-than-expected economic data, while chipmakers fell after the Biden administration said it was halting shipments of AI chips to China.
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Wall Street's main indexes were set to open lower on Tuesday as hotter-than-expected retail sales data stoked worries U.S. interest rates could stay higher for longer, with the Middle East conflict further denting sentiment.
The Biden administration said on Tuesday it plans to halt shipments to China of more advanced artificial intelligence chips designed by Nvidia and others, part of a suite of measures aimed at stopping Beijing from getting cutting-edge U.S. technologies to strengthen its military.
Below is Validea's guru fundamental report for NVIDIA CORP (NVDA). Of the 22 guru strategies we follow, NVDA rates highest using our Quantitative Momentum Investor model based on the published strategy of Wesley Gray. This momentum model looks for stocks with strong and consiste
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The world is changing. Technology used to be just a small piece of our world, limited to computers and mainframes in the 1980s. Today the world is becoming increasingly digital.
Nvidia (NASDAQ: NVDA) is dominating Advanced Micro Devices (NASDAQ: AMD) in their respective artificial intelligence (AI) offerings. Nvidia grew second-quarter revenue by 102% versus AMD's 18% decline. With how large an opportunity AI is, AMD couldn't afford to sit on the sidelin
Futures for Wall Street's main indexes fell on Tuesday as investors assessed diplomatic efforts to contain the Middle East conflict, while awaiting a slew of corporate earnings and data to gauge the state of the U.S. economy.
For Immediate ReleaseChicago, IL – October 17, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the fi
Chipmaker Nvidia (NASDAQ: NVDA) has become a Wall Street darling. It's soared by a whopping 215% year to date as it takes advantage of the opportunity in artificial intelligence (AI), which boosts demand for its cutting-edge hardware.
The Vanguard S&P 500 Growth ETF (VOOG) was launched on 09/09/2010, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Growth segment of the US equity market.
When you get a stock tip, it's important to look beyond the performance of the stock to see how the business is performing. Identifying businesses with a record of growth and large opportunities for business expansion can point you toward stocks that can produce lasting wealth.
The rally in artificial intelligence (AI) stocks greatly benefited Nvidia (NASDAQ: NVDA). The stock is up more than 200% since the beginning of the year and sells close to all-time highs.
When examined over multidecade periods, Wall Street's three major stock indexes -- the Dow Jones Industrial Average (DJINDICES: ^DJI), S&P 500 (SNPINDEX: ^GSPC), and Nasdaq Composite (NASDAQINDEX: ^IXIC) -- are undeniable moneymakers. But when explored over shorter spans, the
Without question, Nvidia (
NASDAQ:NVDA
) dominated proceedings this year thanks to its graphics processors, which help power ever-advancing
artificial intelligence (AI) and machine learning protocols. Nevertheless, investors may need to tread cautiously with the underlying hype train. With expectations heightened, the company just might not be able to replicate prior results. Therefore, I am tactically bearish on NVDA stock.
NVDA Stock May Need a New Viable Catalyst
Since the start of the year,
NVDA stock has gained over 220%, a remarkable achievement given its massive size. Sporting a market capitalization of around $1.14 trillion, Nvidia is no spring chicken. Yet, it’s performing like a technology startup with an exciting new product. Still, its recent print paints a humbler picture, suggesting that the company may need a new (and viable) catalyst.
Since the end of June this year, NVDA stock has only moved up by around 9%. To be sure, the incredible rally that Nvidia enjoyed requires a healthy consolidation to reload for the next phase higher. Naturally, analysts have continued to sing the company’s praises while upping their price targets. At the highest, Rosenblatt Securities’
Hans Mosesmann forecasts NVDA hitting $1,110 per share.
Still, for shares to more than double in value will likely require an exciting new application or venture. For example, what helped catapult NVDA stock earlier was the intense focus on
generative AI. Today, people across various industries are raving about the utility and intuitiveness of
ChatGPT. However, NVDA stock has already priced in this enthusiasm.
Certainly, other AI applications exist to which Nvidia offers tremendous relevance. Perhaps most notably, the company
specializes in automotive software that offers both driver assistance systems and specific autonomous driving capabilities. Unfortunately, this avenue may face significant challenges.
Increasingly, regulators have grown concerned about the safety of autonomous driving systems. Rising incidents suggest that driverless vehicles may be further out than previously thought. Thus, Nvidia needs something fresh and exciting to incentivize investors to hold the risk.
Even Generative AI Might Not be "All That" for Nvidia
While it might be a sacrilegious statement, given the heightened interest in digital intelligence, generative AI might not even be all that great. For instance, while people may still rave about ChatGPT, experts have also noted that the protocol can occasionally emit erroneous statements or “hallucinate” outputs. While that’s not a direct headwind for NVDA stock, such inaccuracies may impugn its market value.
Basically, powering various advanced AI protocols won’t mean much if the output occasionally generates flaws. If you can’t trust the answers 100% of the time, this flaw requires human oversight for correction. However, if an AI system requires such human intervention, why bother with it in the first place?
Now, for answering homework questions, the consequences for inaccurate outputs aren’t as dire. However, if we’re talking about driverless vehicles amid heavy car and pedestrian traffic, hallucinations can be deadly.
In other words, NVDA stock has gained handsomely from the low-hanging fruit of AI. The next step, making AI more consistently reliable, may involve substantial time and financial resources. Such a phase might yield a lower return on investment compared to the low-hanging fruit phase, making NVDA unusually risky.
A Matter of Valuation
About one year ago, NVDA stock traded at an earnings multiple of 44.1x. After soaring almost 300% during the past 365 days, the current earnings multiple stands at just over 110x. Either way, NVDA traded well above the underlying semiconductor industry’s average price/earnings ratio, and its valuation is extremely high at the moment.
Therefore, it’s a classic baseball question. Do you want to keep your starting pitcher, who might be gassed, late in the game? Or do you want to go to the bullpen?
From a practical standpoint, it might make sense to trim excessive exposure to NVDA stock and rotate into a more valuation-attractive idea. The risk-reward profile just isn’t as appealing as it was a year ago.
Is NVDA Stock a Buy, According to Analysts?
Turning to Wall Street, NVDA stock has a Strong Buy consensus rating based on 38 Buys, one Hold, and zero Sell ratings. The
average NVDA stock price target is $649.82, implying 41% upside potential.
The Takeaway: NVDA Stock May Need a Break
There’s a reason why starting pitchers in baseball need a few days in between starts, and the same concept may apply to NVDA stock. To be clear, this assessment isn’t about casting aspersions on Nvidia. It’s been a phenomenal performer, as any cursory glance at the charts will reveal. However, its valuation is high now, and even the best need a break sometimes.
Disclosure
Earnings season is upon us again and one area of the broader technology sector that investors will be watching is the results from semiconductor companies.
In the latest market close, Nvidia (NVDA) reached $460.95, with a +1.39% movement compared to the previous day. This move outpaced the S&P 500's daily gain of 1.06%. Meanwhile, the Dow gained 0.93%, and the Nasdaq, a tech-heav
Wednesday, October 16, 2023The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including NVIDIA Corporation (NVDA), The Procter &
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