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NVIDIA was once a favorite of investors and analysts
NVIDIA stocks clearly in reverse
Analysts are lowering target prices
In recent years, NVIDIA stock has been one of the best on the stock exchange. However, investor sentiment has deteriorated markedly since the end of 2021: NVIDIA shares lost about 56 percent from their record high of $ 346.10 at the end of November, underperforming the NASDAQ Composite tech index, which fell by almost a third over the same period. Dot.
Analysts are increasingly giving NVIDIA the thumbs down
Most of the analysts who monitor NVIDIA’s stock continue to keep their chip and graphics card makers’ share prices rising, despite the sharp fall in prices in recent months and declining market sentiment for tech stocks in general and cryptocurrency-related stocks in particular. The analyst average rating for NVIDIA is “Overweight” and the average target price of $ 245.86 is well above the current share price ($ 153.72, closing July 14). However, the voices of skeptics are rising: Recently, several analytical houses have critically analyzed their NVIDIA price or price targets.
New Street analyst lowers NVIDIA’s price target
In early July, it was New Street’s Pierre Ferragu who became more skeptical about the company’s crypto business in particular. In particular, the expert referred to the once extremely profitable business with graphics cards for cryptocurrency miners. Since the beginning of 2021, miners have spent about $ 3 billion on crypto hardware, with much of it recently entering the second-hand market at much lower prices. The background, in particular, is the huge drop in cryptocurrency prices which has made sharpening no longer profitable for many miners. Aftermarket hardware sales drive down prices, prompting Ferrag to lower NVIDIA’s gaming revenue forecasts for the third and fourth fiscal quarters by 17 percent and 18 percent respectively, Barrons reports. According to the portal, the analyst left the target price of $ 220 intact.
KeyBanc targets chip manufacturers
Meanwhile, John Vinh, an analyst at KeyBanc Capital Markets, revised the target price: Instead of $ 250, he now only believes NVIDIA stock could climb to $ 230, even if it maintains its “overweight” rating. Vinh’s valuation also seemed to struggle amid weakening demand in a tougher macroeconomic environment. He apparently had concerns in particular about the gaming GPU segment and the crypto business given the slowdown in cryptocurrency mining. “Supply was significantly affected by the blockages in China in Q2, while demand continued to weaken in all end markets (computers, smartphones, IoT),” an analyst wrote in a statement quoted by Investing.
NVIDIA’s competitor AMD also overlooked the downgrade in this context: Vinh adjusted its target price to $ 130 despite being overweighted.
Citigroup withdraws high target price for NVIDIA stock
Citigroup has also recently softened expectations of NVIDIA’s share price movements: Atif Malik, a bank analyst, downgraded NVIDIA’s shares from $ 315 to $ 285, but still recommends buying them. Like his colleagues, Malik also referred to the weak demand for graphics cards from the gaming segment and at the same time lowered the “gaming forecasts for October [Quartal] seasonal demand for PCs and increased retail stocks ”- quoted expert Barrons.
Semiconductor stocks in crisis?
In general, times are tough for semiconductor manufacturers these days. High inflation should affect consumer spending, which should also translate into weaker demand for notebooks and PCs. Against this background, experts from Barclays expect visible consequences, especially in the second half of the year, which is why they critically looked at NVIDIA’s competitors, AMD and Intel. AMD’s target price has been lowered from $ 115 to $ 85, while Intel’s target price has been lowered from $ 45 to $ 40.
Editors of finanzen.net
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