What Next For Nvidia Corporation Stock?

Shares of NVIDIA Corporation tanked nearly 10% in the last trading session. Is it Time to sell NVDA stock? 


Shares of Santa Clara, California-based NVIDIA Corporation (Nasdaq:NVDA) fell by 9.3% to close the last trading session on Feb 23 at a price of $100.49. If that wasn't enough, NVDA stock price fell by another 1.9% in after-hours trade, closing the extended trading session at a price of $98.56, levels which were last seen over 2 months ago. Is there further pain ahead of NVIDIA investors? Is is time to sell your NVIDIA shares and book the profits or an opportunity to buy in at these lower prices?

Selling NVIDIA stock Will Sacrifice Long-Term Gains.

Yes, that's precisely what we think of NVIDIA stock right now. Selling NVIDIA now could save you some short-term pain, but could also cost you meaningful upside over the long term. A quote from Don Connelly aptly summarizes our thoughts on NVIDIA. "Imagine that you had to drive from New York City to Los Angeles. You’re in downtown Manhattan hopelessly stuck in traffic. Bicycle messengers are whizzing past. You jump out of your car, sell your car on the spot (at a ridiculously low price), buy a bicycle, and continue your trip to the West Coast. As absurd as this scenario sounds, investors do it everyday when they make short-term decisions for long-term journeys. Stick with a vehicle that will take you to the end of the road." Well, the long term for NVIDIA stock is much brighter than what has been projected by the recent bearish calls. Why?

Well, let's just look a bit deeper into what caused the sell-off in NVIDIA stock. A couple of recent analyst reports seem to be at the heart of this misery for NVIDIA investors. As recently as Feb 22, Romit Shah, from the desks of Nomura, downgraded NVIDIA stock by multiple notches, raising concern over the firm's gaming segment. We addressed these 'Gaming' segment concerns in our previous NVIDIA post, citing the management commentary from the latest earnings call. Closely following the report from the Nomura analyst was one from the desks of BMO capital. BMO Capital's Ambrish Srivastava downgraded NVDA stock to underperform while also cutting his price target to $85, from the prior $100 target. The analyst believes NVDA stock is 'overvalued' as "the perfect storm in fundamentals that drove the rarely seen magnitude of earnings upside is ebbing." Well, Is it really?

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Disclosure: Neither Amigobulls, nor any members of its staff hold positions in any of the stocks discussed in this post. The author may not be a ...

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