Why did NVIDIA's stock price fall
$NVIDIA(NVDA.US$ After the stock price of rose more than three times over the past year, it seemed inevitable that it would not be able to maintain that furious pace. Stock prices have finally begun to recover some of that increase in recent weeks.
Today, the Barons newspaper picked up analyst reports and showered cold water on many investors' growth forecasts relating to sales of NVIDIA's artificial intelligence (AI) computer chips, and this decline widened. The stock price fell close to 5% and fell 2.8% at 1:30 p.m. (US Eastern Time).
Artificial intelligence (AI) superiority is coming to an end
Nvidia has boasted overwhelming strength in supplying hardware and even software to meet high-power computing needs created by the advent of many AI applications. $Microsoft(MSFT.US$ 、 $Meta Platforms(META.US$ , and even more $Tesla(TSLA.US$ Megacap technology companies, including, have spearheaded long lines of buyers.
However, D.A. Davidson analyst Gil Luria believes that is the reason NVIDIA's stock price is falling. Luria explained in a recent report that these major technology companies will soon redirect spending to expand production of AI-related hardware manufactured in-house. Luria believes this will lead to NVIDIA's “drastic recession until 2026.”
Based on this idea, D.A. Davidson predicts that NVIDIA's stock price will fall to $620 per share. This is a close to 30% drop from Monday's closing price. However, investors should also take this forecast in a larger context. NVIDIA is more than just an AI chip company. There is a possibility that profits will grow from other fields, including autonomous driving technology, over the next few years.
The rise in NVIDIA's stock price is certainly far and fast. However, even when predicting that target stock price, Luria maintains a “hold” rating. For long-term investors, that would probably be wise. If stock prices continue to fall, there is even a possibility that it will be an opportunity to buy more.
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