Is it finally an opportunity for NVIDIA to reverse the decline and buy?

Investors are in a dilemma due to NVIDIA's stock price reversal. Should I sell at a profit margin? Or is this an opportunity to buy the other way around?

As a leader in the AI chip field, NVIDIA has taken the lead in recent stock price performance. At one point, the total market capitalization surpassed Microsoft and Apple, and it became the largest company by market capitalization in the United States. The company's stock price has risen more than 1,000% since 2022/10, and has risen 206% in the past 12 months alone.

Bullish investors are convinced the company has significant room for growth in the future
SeekingAlpha analyst Bill Gunderson sees that NVIDIA has the most potential growth potential over the next 5 years, its value will double, and there is a possibility that it will surpass Microsoft and Apple in terms of market capitalization.

Analyst Robert Castellano pointed out that NVIDIA dominates the AI field with GPU processors, and the market share in 2023 is 96%, and the sales share of all suppliers is 92%. Also, AI in data centers occupied a 57% share of the AI market in 2023. He pointed out that AI technology has been introduced in various fields such as healthcare, automobiles, financial services, and retail.

The analyst sees that it is unlikely that new companies will rise along with NVIDIA in this field. Even Intel (INTC), which is a powerhouse in the chip industry, is struggling to manufacture high-end GPUs that appeal to game enthusiasts. The next standalone GPU that Intel plans to release is 2025. This highlights NVIDIA's stronghold in the GPU market, and he pointed out that competition expected soon will be minimal.

NVIDIA is already in a bubble = bearish investors
There is also fundamental support for NVIDIA's outstanding performance, but Cavenagh Research pointed out that a significant part of the price increase was due to bullish momentum in trading and speculation. Over the past few months, Cavenagh Research also pointed out that mass purchases of call options have caused option dealers to hedge their positions by buying shares, creating a feedback loop of price increases.

The agency predicted that there is a possibility that stock prices will plummet due to this major option maturity event since “Gamma Squeeze” will come to an end on 6/21, when close to 5 million copies of the call will expire on 6/17, and option dealers will embark on eliminating hedging. From the viewpoint of fundamentals, the agency used a residual earnings model (residual earnings model), pointed out that NVIDIA shares are overvalued, and calculated a target price of 76.4 dollars per share.

SeekingAlpha analyst Damir Tokic also pointed out that while NVIDIA's stock price is extremely expensive in terms of evaluation ratios, earnings growth has already slowed. Also, he points out that the risk of a recession is increasing in terms of the US macroeconomy.