Shares of Nvidia (NVDA 0.38%) were in fine form on the stock market last month, gaining 12% and giving investors some relief after a terrible start to 2022. But, April is turning out to be another poor month for the graphics card specialist.
Nvidia stock is down nearly 20% so far this month, giving up all the gains that it scored in March. The pullback can be attributed to the negative analyst sentiment about the state of the market the company operates in. However, the stock's decline has made it attractive, especially considering the terrific growth that Nvidia has been clocking on a consistent basis.
Image source: Getty Images.
Nvidia is available at an enticing valuation right now
Nvidia's recent crash has brought the company's price-to-earnings (P/E) ratio down to 55.8, which is lower than the stock's five-year average earnings multiple of 58.5. It is also worth noting that Nvidia stock is trading at its cheapest valuation since 2019 when it had a P/E ratio of 60. The stock was trading at more expensive levels in 2020 and 2021, hitting earnings multiples of 85 and 90, respectively.
Of course, Nvidia is still expensive as compared to the broader market. The Nasdaq 100, for instance, has a P/E ratio of 31.8. Nvidia bulls, however, could justify this relatively rich valuation given its pace of growth. Following a 61% increasein revenue in fiscal 2022 (which ended on Jan. 30, 2022) to $26.9 billion, Nvidia expects $8.1 billion in revenue in the first quarter of fiscal 2023, which would be a 43% increaseover the prior-year period.
Its earnings are expectedto jump to $1.29 per share from $0.91 per share in the year-ago quarter. What's more, analysts are expecting Nvidia to finish fiscal 2023 with a 30% growth in revenue to $34.8 billion. So investors looking to buy a fast-growing tech stock may be interested in buying Nvidia, given its sharp pullback. But will this be a good idea? Let's find out.
Wall Street sees headwinds due to weakness in the graphics cards market
Nvidia stock has been the subject of downgrades on Wall Street due to a potential weakness in the demand for consumer graphics processing units (GPUs) used in personal computers (PCs) for video gaming. Investment banking firm Baird pointsout that sanctions on Russia have led to a slowdown in demand for consumer graphics cards, as the country is reportedly a key buyer of GPUs used by both gamers and cryptocurrency miners.
Baird analyst Tristan Gerra has cut his price target on Nvidia stock to $225 from $360 and lowered his rating from "outperform" to "neutral." Gerra estimates that customers have started canceling GPU orders because of an oversupply in Western Europe and Asia, as well as a slowdown in demand from key markets such as China. As a result, the price of GPUs has starteddropping. The analyst believes that lowered graphics card demand could negatively impact the company's revenue in the second half of the year.
Truist is another bank that's predictinga near-term slowdown in the demand for chips that are used in computers and other consumer devices. The bank cut its price target on Nvidia stock to $298 from $347. This negative sentiment could continue to weigh on Nvidia stock and make its valuation more attractive.
However, savvy investors shouldn't forget that Nvidia has solid long-term prospects in multiple markets, which is why it would be a good idea to accumulate the stock on the dips.
Investors need to focus on the big picture
A near-term graphics card oversupply doesn't bode well for Nvidia, considering that gaming is its largest business, producing 46% of its total revenue last fiscal year. But investors shouldn't miss the fact the slowdown is likely to be temporary, as Nvidia stands to gain from a GPU upgrade cycle.
Nvidia pointed out in its 2022 investor day presentation that 71% of its installed base is running graphics cards based on older architectures. More specifically, just 29% of Nvidia's users are on RTX series graphics cards, which were launched in the second halfof 2018. The new RTX series cards have brought about huge performance gains over the GTX series cards -- which most of its user base is running.
What's more, gamers who are upgrading to Nvidia's graphics cards based on the latest Ampere architecture are spending $300 more as compared to earlier cards. So, the graphics card upgrade cycle should give Nvidia's video gaming business a nice boost in the long run due to a combination of strong volumes and improved pricing.
Additionally, the company's improving prospects in the automotive market and its dominant position in the booming data center GPU space should ensure that Nvidia remains a top tech stock in the long run.
In all, Nvidia's multiple catalysts make it a stock worth buying on the dip, as the company is expected to report an annual earnings growth rate of 30% for the next five years. However, it won't be surprising to see it do better thanks to the impressive growth drivers it has in several end markets.
Harsh Chauhanhas no position in any of the stocks mentioned. The Motley Fool owns and recommends Nvidia. The Motley Fool has adisclosure policy.
FAQs
His clients may own shares of the companies mentioned. The Motley Fool has positions in and recommends Nvidia.
Is it a good idea to buy Nvidia stock? ›
NVDA stock has staged a strong comeback in 2023, soaring to highs. But shares are not in a proper buy zone, and they may due for a pullback. Nvidia's latest supercomputer announcements and its earnings report have further highlighted its AI leadership. Bottom line: Nvidia stock is not a buy.
Is Nvidia a buy sell or hold? ›
The NVIDIA stock holds a sell signal from the short-term moving average; at the same time, however, there is a buy signal from the long-term average. Since the short-term average is above the long-term average there is a general buy signal in the stock giving a positive forecast for the stock.
Is NVDA stock Overvalued? ›
At a 2-star rating, Nvidia stock is overvalued compared with our fair value estimate. Our $300 fair value estimate assumes a fiscal 2024 (year ending January 2024) adjusted price/earnings ratio of 37 times.
Does Warren Buffett own NVIDIA? ›
Nvidia. The third surprising stock you'd never have guessed Warren Buffett owns is graphics card and semiconductor solutions specialist Nvidia (NVDA 1.25%).
Is NVIDIA a high risk stock? ›
NVIDIA Investment Opportunity
NVIDIA has a volatility of 3.72 and is 4.33 times more volatile than NYSE Composite. 32 of all equities and portfolios are less risky than NVIDIA.
How low will Nvidia go? ›
Stock Price Forecast
The 44 analysts offering 12-month price forecasts for NVIDIA Corp have a median target of 455.00, with a high estimate of 600.00 and a low estimate of 175.00. The median estimate represents a +17.33% increase from the last price of 387.81.
Will Nvidia stock reach $1,000? ›
ChatGPT stated: “Based on these factors and other market conditions, a possible trading range for Nvidia's stock price by 2030 could be between $1,000 and $2,500 per share.”
Where will Nvidia be in 10 years? ›
Nvidia is set for terrific growth over the next 10 years
Analysts are expecting a turnaround in the company's fortunes in the current fiscal year, forecasting an 11% increase in revenue. Nvidia is projected to deliver stronger revenue growth of 24% in fiscal 2025, generating $37 billion.
What is the future of NVIDIA stock? ›
NVIDIA is forecasted to grow earnings and revenue by 30.9% and 23.6% per annum respectively. EPS is expected to grow by 30.5%. Return on equity is forecast to be 54.8% in 3 years.
As of 2023-06-09, the Fair Value of NVIDIA Corp (NVDA) is 48.51 USD. This value is based on the Peter Lynch's Fair Value formula. With the current market price of 385.1 USD, the upside of NVIDIA Corp is -87.4%.
What is the 5 year forecast for NVIDIA stock? ›
NVIDIA Corp quote is equal to 387.700 USD at 2023-06-12. Based on our forecasts, a long-term increase is expected, the "NVDA" stock price prognosis for 2028-06-02 is 465.098 USD. With a 5-year investment, the revenue is expected to be around +19.96%. Your current $100 investment may be up to $119.96 in 2028.
What is the value of Nvidia in 2023? ›
The table below lists the largest technology companies as of June 1, 2023. Apple is the world's most valuable company with a market value of $2.78 trillion, followed by Microsoft ($2.44 trillion), Alphabet ($1.56 trillion), Amazon ($1.23 trillion) and then Nvidia ($0.93 trillion).
What will NVDA stock price be in 2025? ›
Long-Term NVIDIA Stock Price Predictions
| Year | Prediction | Change |
|---|
| 2025 | $ 817.86 | 110.76% |
| 2026 | $ 1,187.31 | 205.96% |
| 2027 | $ 1,723.67 | 344.18% |
| 2028 | $ 2,502.32 | 544.83% |
3 more rowsWeak sales of graphics cards have led to an inventory pile-up at Nvidia. The graphics specialist's margins and earnings have taken a hit thanks to rising inventory levels. Nvidia may find it challenging to clear graphics card inventories, as a weak PC market is expected to persist in 2023.
Who owns the most shares of Nvidia? ›
The top individual shareholders of Nvidia are Jen-Hsun ("Jensen") Huang, Colette M. Kress, and Mark A. Stevens, and the top institutional shareholders are Vanguard Group Inc., BlackRock Inc. (BLK), and FMR LLC.
Who owns most of Nvidia? ›
Who owns Nvidia? Nvidia (NASDAQ: NVDA) is owned by 64.04% institutional shareholders, 4.45% Nvidia insiders, and 31.52% retail investors. Jen Hsun Huang is the largest individual Nvidia shareholder, owning 95.11M shares representing 3.85% of the company. Jen Hsun Huang's Nvidia shares are currently valued at $36.88B.
What 1 stock does Warren Buffett own? ›
Top stocks Warren Buffett owns by size
| Stock | Number of Shares Owned | Value of Stake |
|---|
| Coca-Cola (NYSE:KO) | 400,000,000 | $24.6 billion |
| American Express (NYSE:AXP) | 151,610,700 | $23.6 billion |
| Chevron (NYSE:CVX) | 167,353,771 | $20.2 billion |
| Occidental Petroleum (NYSE:OXY) | 211,707,119 | $12.8 billion |
6 more rowsFor long-term investors, Nvidia still looks like a good option, but you may want to consider dollar-cost averaging into the stock to cushion a potential pullback in its price. Expect a big swing from the stock when Nvidia reports earnings on May 24, even as analysts expect revenue and profits to decline once again.
Is Nvidia stock expected to grow? ›
NVDA Stock 12 Months Forecast
Based on 36 Wall Street analysts offering 12 month price targets for Nvidia in the last 3 months. The average price target is $449.92 with a high forecast of $600.00 and a low forecast of $230.00. The average price target represents a 16.05% change from the last price of $387.70.
Technical Indicators
| Indicator | Level | Indication |
|---|
| ROC(20) | 37.33 | Bullish |
| CCI(20) | 56.03 | Bullish |
| Williamson%R(14) | -24.89 | Bullish |
| ATR(14) | 15.02 | Low Volatility |
6 more rowsNvidia has been hurt by fading pandemic-era demand for gaming graphics cards. Nvidia warned that shortfalls in its gaming segment revenue would hamper second-quarter results. Analysts were left wondering how much can be blamed by a drop in demand from gamers, compared with cryptocurrency miners.
Who is Nvidia competitor? ›
NVIDIA's competitors and similar companies include Cisco, Intel, Qualcomm, AMD, Broadcom, Hewlett Packard Enterprise and Renesas Electronics.
Will Nvidia be a trillion dollar company? ›
Chipmaker Nvidia is now worth nearly as much as Amazon. America's largest semiconductor company has vaulted past the $1 trillion market capitalization mark, a milestone reached by just a handful of companies including Apple, Amazon, and Microsoft.
What is NVDA highest stock price? ›
The all-time high NVIDIA stock closing price was 401.07 on May 30, 2023. The NVIDIA 52-week high stock price is 419.38, which is 8.2% above the current share price. The NVIDIA 52-week low stock price is 108.13, which is 72.1% below the current share price. The average NVIDIA stock price for the last 52 weeks is 198.47.
What will NVDA stock price be in 2024? ›
Nvidia Stock Price Forecast 2023-2024
The rise from today to year-end: +74%. In the middle of 2023, we expect to see $530 per 1 Nvidia. In the first half of 2024, the Nvidia price will climb to $878; in the second half, the price would add $69 and close the year at $947, which is +144% to the current price.
What was the price of NVDA in 2007? ›
The closing price for NVIDIA (NVDA) in 2007 was $7.80, on December 31, 2007. It was up 37.7% for the year.
Why is NVIDIA dividend so low? ›
That sky-high valuation is another reason Nvidia offers such a paltry dividend yield. The company trades at such a premium price that it must continue growing rapidly to justify its valuation. If it slows down, shares could significantly underperform from here.
Is NVIDIA a chip stock? ›
Nvidia Becomes the First Chip Stock to Reach $1 Trillion.
Is Costco a buy or sell? ›
Costco's analyst rating consensus is a Moderate Buy. This is based on the ratings of 24 Wall Streets Analysts.
RSU. At Nvidia, Main RSUs are subject to a 4-year vesting schedule: 25% vests in the 1st-year (25.00% annually) 25% vests in the 2nd-year (6.25% quarterly)
How much is buy NVIDIA stock? ›
Performance Outlook
| Previous Close | 387.70 |
|---|
| Bid | 388.90 x 1400 |
| Ask | 388.73 x 800 |
| Day's Range | 386.55 - 393.25 |
| 52 Week Range | 108.13 - 419.38 |
3 more rows7 days ago
What is NVDA's 50-day moving average? NVDA's 50-day moving average is 305.15, which suggests NVDA is a Buy.
What is the average annual return of NVIDIA stock? ›
1 NVIDIA Corporation (NVDA) Stock Yearly Returns
| Year | Opening Price | Annual Return |
|---|
| 2019 | 33.1248 | 76.94 % |
| 2020 | 58.6121 | 122.3 % |
| 2021 | 130.292 | 125.48 % |
| 2022 | 293.785 | -50.26 % |
6 more rowsNVIDIA went public on January 22, 1999 at $12/share.
How high is NVIDIA expected to go? ›
NVDA stock is now up 160% so far in 2023, pushing its market cap up to $939 billion. If the idea is to buy low, then it's perhaps reasonable to assume the easy money in NVDA has already been made.
How big will NVIDIA be in 2030? ›
What will the NVDA price be in 5 years and 10 years – forecast by years
| Year | Price in the middle of the year | Price at the end of the year |
|---|
| 2028 | $2878.23 | $3837.64 |
| 2029 | $3779.49 | $5039.32 |
| 2030 | $4901.71 | $6535.61 |
| 2031 | $5669.24 | $7558.98 |
8 more rowsAs of 2023-06-11, the Intrinsic Value of NVIDIA Corp (NVDA) is 40.17 USD. This value is based on the model Discounted Cash Flows (Growth Exit 5Y). With the current market price of 387.44 USD, the upside of NVIDIA Corp is -89.6%. The range of the Intrinsic Value is 29.18 - 65.33 USD.
What do analysts say about NVIDIA stock? ›
Stock Price Forecast
The 44 analysts offering 12-month price forecasts for NVIDIA Corp have a median target of 455.00, with a high estimate of 600.00 and a low estimate of 175.00. The median estimate represents a +17.33% increase from the last price of 387.81.
What does Zacks say about NVIDIA? ›
Nvidia (NVDA) Price Targets
| Average Price Target | Highest Price Target | Lowest Price Target |
|---|
| $431.25 | $600.00 | $133.00 |
NVIDIA is forecasted to grow earnings and revenue by 27.4% and 22.2% per annum respectively. EPS is expected to grow by 26.6%. Return on equity is forecast to be 54.8% in 3 years.
Which ETFs have the most NVDA exposure? ›
417 ETFs
| Ticker/Name | Segment | % Allocation |
|---|
| SMHVanEck Semiconductor ETF | Equity: Global Semiconductors | 17.22% |
| WUGIAXS Esoterica NextG Economy ETF | Equity: Global 5G | 15.80% |
| VCARSimplify Volt RoboCar Disruption and Tech ETF | Equity: Global Mobility | 12.36% |
| TRFKPacer Data and Digital Revolution ETF | Equity: Global Digital Economy | 12.03% |
5 more rowsChatGPT stated: “Based on these factors and other market conditions, a possible trading range for Nvidia's stock price by 2030 could be between $1,000 and $2,500 per share.”
How much will NVIDIA stock be worth in 10 years? ›
Key Points. Nvidia's sales have multiplied impressively in the past decade thanks to the growing applications of its graphics cards. Nvidia could get close to a $3 trillion valuation over the next 10 years based on its robust market share and emerging catalysts.
Is NVIDIA bullish or bearish? ›
Technical Indicators
| Indicator | Level | Indication |
|---|
| ROC(20) | 37.33 | Bullish |
| CCI(20) | 56.03 | Bullish |
| Williamson%R(14) | -24.89 | Bullish |
| ATR(14) | 15.02 | Low Volatility |
6 more rowsNvidia Stock Price Forecast 2023-2024
Nvidia price started in 2023 at $146.14. Today, Nvidia traded at $393.27, so the price increased by 169% from the beginning of the year. The forecasted Nvidia price at the end of 2023 is $698 - and the year to year change +378%. The rise from today to year-end: +77%.
What is the 5 year forecast for NVDA? ›
The 35 analysts offering 2025 price forecasts for NVIDIA have a median target of $550, with a high estimate of $610 and a low estimate of $485. The average estimate represents a 120% increase from the current price.
Who owns the most NVIDIA stock? ›
Who owns Nvidia? Nvidia (NASDAQ: NVDA) is owned by 64.04% institutional shareholders, 4.45% Nvidia insiders, and 31.52% retail investors. Jen Hsun Huang is the largest individual Nvidia shareholder, owning 95.11M shares representing 3.85% of the company. Jen Hsun Huang's Nvidia shares are currently valued at $36.88B.
What is the highest NVIDIA stock? ›
The all-time high NVIDIA stock closing price was 401.11 on May 30, 2023. The NVIDIA 52-week high stock price is 419.38, which is 8.5% above the current share price. The NVIDIA 52-week low stock price is 108.13, which is 72% below the current share price. The average NVIDIA stock price for the last 52 weeks is 195.90.
Is NVIDIA a dividend stock? ›
High Dividend: NVDA's dividend (0.041%) is low compared to the top 25% of dividend payers in the US market (4.94%).
7 Best ETFs to Buy Now
| ETF | YTD performance as of June 2 |
|---|
| Ark Innovation ETF (ARKK) | 33.2% |
| Global X MSCI Greece ETF (GREK) | 28.8% |
| Pimco Enhanced Short Maturity Active ETF (MINT) | 2.5% |
| iShares Gold Trust (IAU) | 6.8% |
3 more rowsJun 5, 2023
100 Highest 5 Year ETF Returns
| Symbol | Name | 5-Year Return |
|---|
| QCLN | First Trust NASDAQ Clean Edge Green Energy Index Fund | 20.86% |
| TQQQ | ProShares UltraPro QQQ | 19.80% |
| XLK | Technology Select Sector SPDR Fund | 19.63% |
| VGT | Vanguard Information Technology ETF | 18.77% |
91 more rowsInstitutional investors account for 64.8% of NVIDIA's ownership. Retail investors hold 31.2% and individual insiders 4%. Asset management firm Vanguard is the largest shareholder, with an 8.09% stake, while Nvidia's president and CEO is the company's fifth largest investor and its top individual shareholder.
