NVIDIA Stock Drop: Should You Buy the Dip or Run?

$NVIDIA(NVDA.US)$ , once the world's most valuable company by market capitalization, enjoyed a fleeting glory for just one trading day before its share price reversed, falling 3.45% overnight. This shift has left investors in a dilemma: should they seize the opportunity to profit and exit, or should they hold on firmly or even increase their holdings?

Bullish Outlook:
Many investors remain confident in NVIDIA's future. As a major supplier of AI chips, NVIDIA stands at the forefront of technological innovation. Analysts predict that NVIDIA's revenue will double to 120 billion this fiscal year and is expected to reach 160 billion in the next fiscal year. In contrast, Microsoft's expected revenue growth is only around 16%. Optimists believe that NVIDIA's chips in the AI data center sector are irreplaceable, and their powerful proprietary software framework further solidifies their market-leading position.

Bearish Outlook:
However, the soaring share price has also raised concerns about overvaluation. NVIDIA's forward price-to-earnings ratio has increased by 80% this year, making it more vulnerable to significant corrections in the face of adverse news.
Analyst Gil Luria has a "neutral" rating on NVIDIA and has set a target price of 90,signi ficantly lower than the current share price of around 130. He worries that as technology giants like $Microsoft(MSFT.US)$ , $Meta Platforms(META.US)$ , and $Alphabet-C(GOOG.US)$ build their own AI computing capabilities, NVIDIA's market position may be challenged. Morningstar analysts also believe that over time, leading suppliers like Amazon, Microsoft, and Meta may reduce their dependence on NVIDIA, diversifying their supplier base.