Nvidia Stock Takes a Breather
As of 3:13 p.m. ET on Tuesday, shares of NVIDIA (NASDAQ: NVDA) had fallen as much as 6%. Despite this decline, the stock was still trading at 5.6% below its previous close. The drop in value appears to be connected to overall market weakness and a need for Nvidia’s stock to take a breather after reaching a new record high on Monday.
Market Volatility
Investors seem to be digesting the numerous product announcements made by the artificial intelligence (AI) chipmaker during the kickoff of CES in Las Vegas. These announcements include:
- Project DIGITS: A pocket-sized personal AI supercomputer powered by Nvidia’s Grace Blackwell Superchip.
- Next-generation GeForce RTX 50 series gaming GPUs and laptops: Powered by AI and Nvidia’s Blackwell architecture.
- Cosmos platform: With new AI models for robots, autonomous vehicles, and computer vision.
- AI Blueprints for Agentic AI: A system that helps developers ‘build, test, and run AI agents anywhere’ to automate various business functions.
These announcements showcase the breadth of Nvidia’s innovative efforts in the field of artificial intelligence. However, investors may be taking a step back to assess the implications of these developments on the company’s future prospects.
Road Ahead
Wedbush analyst Dan Ives noted that Nvidia CEO Jensen Huang’s speech at CES ‘felt more like a rock concert vibe than a tech CEO speech.’ Despite this unconventional approach, Ives believes that Nvidia’s stock still has room to run. The analyst predicts that Nvidia’s market cap, currently sitting at around $3.5 trillion, will clear $4 trillion and could reach as high as $5 trillion over the next 12-18 months.
This suggests potential upside of up to 44% for investors who choose to hold onto their shares. Furthermore, Ives points out that Nvidia’s stock is remarkably affordable, selling at roughly 32 times its estimated earnings for fiscal 2026.
Should You Invest in Nvidia?
Before making a decision, consider the following:
- The Motley Fool Stock Advisor analyst team has identified what they believe are the top 10 stocks for investors to buy now.
- Nvidia was not one of the selected stocks.
- If you had invested $1,000 in Nvidia when it made this list on April 15, 2005, your investment would have grown to around $915,786 by January 6, 2025.
Investing in the stock market can be a complex and nuanced decision. It is essential to do thorough research and consider multiple perspectives before making an informed choice.
Conclusion
Nvidia’s recent drop in value may be seen as an opportunity for investors to reassess their position on the company. With its impressive track record of innovation and growth, Nvidia remains a strong contender in the field of artificial intelligence. However, it is crucial to consider both the potential upside and the risks associated with investing in any stock.
As always, it is essential to do your own research and consult with financial experts before making investment decisions.
Sources
- The Motley Fool
- NVIDIA (NASDAQ: NVDA)
- Wedbush analyst Dan Ives
