Nvidia experienced a drop in its stock price on Friday, continuing the previous day’s losses. Despite a post-split rally, the chipmaker’s momentum seems to be waning as shares fell by 3.4% to $126.33. The decline on Thursday led to Nvidia losing its position as the world’s most valuable company to Microsoft.
This year, Nvidia’s shares have risen by 164%, outperforming the S&P 500 and Nasdaq Composite Index, which saw increases of 15% and 18% respectively. Concerns have emerged regarding the company’s high profitability compared to the overall market, with fears that any misstep could result in a significant decline. However, Wall Street analysts remain optimistic about Nvidia’s long-term prospects.
Analyst Vivek Arya from BofA Securities noted that the rapid increase in Nvidia’s shares makes it susceptible to short-term profit-taking, but any volatility is likely to be brief. Arya emphasized that AI hardware deployment is still in the early stages of a multi-year cycle, and with the upcoming Blackwell chips, Nvidia is expected to continue generating revenue from software.
BofA Securities maintains a $150 price target for Nvidia and rates the stock as a Buy, considering it one of the top choices in the market. In comparison, other chip manufacturers like Advanced Micro Devices and Intel also experienced slight declines in their stock prices.
Overall, while Nvidia faced setbacks in its stock performance, analysts like Arya remain positive about the company’s long-term trajectory due to its promising technology and market positioning. This suggests that despite short-term fluctuations, Nvidia’s innovative approach to AI hardware and software could continue to drive its growth and maintain investor interest.
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https://www.barrons.com/amp/articles/nvidia-stock-price-drop-today-92d914ed
