NVIDIA (NASDAQ:NVDA) Stock Gets Downgrade from Aletheia Capital

Key Points

• Aletheia Capital downgraded NVIDIA from “buy” to “hold,” while most analysts remain positive: 53 rate the stock Buy or Strong Buy, with an average price target of $317.57.
• NVIDIA’s latest reported quarter beat expectations, with earnings of $2.22 per share and revenue of $96.22 billion, up 105.9% year over year.
• The board authorized a $150 billion share-repurchase plan, allowing NVIDIA to buy back up to 2.8% of its shares.

NVIDIA (NASDAQ:NVDA - Get Free Report) was downgraded by equities researchers at Aletheia Capital from a "buy" rating to a "hold" rating in a report released on Monday, FinViz reports.

A number of other research analysts have also weighed in on the stock. BNP Paribas Exane reaffirmed an "outperform" rating and issued a $345.00 price target on shares of NVIDIA in a research note on Monday, October 5th. Cantor Fitzgerald restated an "overweight" rating and set a $350.00 price objective on shares of NVIDIA in a report on Thursday, October 1st. JPMorgan Chase & Co. boosted their price objective on shares of NVIDIA from $280.00 to $320.00 and gave the company an "overweight" rating in a research report on Thursday, August 27th. Daiwa Securities Group cut their price objective on shares of NVIDIA from $255.00 to $245.00 and set an "outperform" rating on the stock in a research report on Thursday, September 17th. Finally, Royal Bank Of Canada reaffirmed an "outperform" rating and issued a $330.00 target price on shares of NVIDIA in a research note on Monday. Five investment analysts have rated the stock with a Strong Buy rating, forty-eight have issued a Buy rating and two have given a Hold rating to the company. According to MarketBeat, the stock has an average rating of "Buy" and an average price target of $317.57.

NVIDIA Price Performance

Shares of NVDA stock opened at $178.67 on Monday. NVIDIA has a 12-month low of $164.27 and a 12-month high of $243.37. The firm has a market capitalization of $4.31 trillion, a price-to-earnings ratio of 29.00, a price-to-earnings-growth ratio of 1.54 and a beta of 2.21. The company has a quick ratio of 3.85, a current ratio of 4.59 and a debt-to-equity ratio of 0.14. The firm has a fifty day moving average of $219.03 and a 200-day moving average of $204.50.

NVIDIA (NASDAQ:NVDA - Get Free Report) last released its quarterly earnings data on Wednesday, August 26th. The computer hardware maker reported $2.22 EPS for the quarter, beating analysts' consensus estimates of $2.09 by $0.13. The business had revenue of $96.22 billion during the quarter, compared to analysts' expectations of $92.27 billion. NVIDIA had a net margin of 63.66% and a return on equity of 96.04%. The firm's quarterly revenue was up 105.9% on a year-over-year basis. During the same quarter in the prior year, the company earned $1.05 EPS. On average, equities research analysts forecast that NVIDIA will post 9.30 earnings per share for the current year.

NVIDIA announced that its Board of Directors has initiated a stock repurchase plan on Monday, September 28th that allows the company to buy back $150 billion in shares. This repurchase authorization allows the computer hardware maker to purchase up to 2.8% of its stock through open market purchases. Stock repurchase plans are often a sign that the company's management believes its stock is undervalued.

Insiders Place Their Bets

In other NVIDIA news, Director Mark Stevens sold 622,239 shares of the business's stock in a transaction dated Friday, September 4th. The shares were sold at an average price of $231.62, for a total transaction of $144,122,997.18. Following the sale, the director directly owned 2,336,531 shares of the company's stock, valued at $541,187,310.22. The trade was a 21.03% decrease in their position. The sale was disclosed in a filing with the SEC, which is available through this link. Also, CFO Colette Kress sold 34,918 shares of the stock in a transaction dated Thursday, September 17th. The stock was sold at an average price of $219.05, for a total transaction of $7,648,787.90. Following the transaction, the chief financial officer owned 765,103 shares of the company's stock, valued at approximately $167,595,812.15. This represents a 4.36% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 1,766,118 shares of company stock valued at $399,450,353 in the last three months. 3.94% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On NVIDIA

A number of institutional investors and hedge funds have recently made changes to their positions in NVDA. Warner Group LLC raised its position in shares of NVIDIA by 5.6% in the third quarter. Warner Group LLC now owns 115,354 shares of the computer hardware maker's stock valued at $26,345,000 after purchasing an additional 6,154 shares during the period. Proactive Wealth Strategies LLC boosted its holdings in shares of NVIDIA by 4.9% during the 3rd quarter. Proactive Wealth Strategies LLC now owns 146,321 shares of the computer hardware maker's stock worth $33,422,000 after buying an additional 6,886 shares during the period. Formulate Financial LLC boosted its holdings in shares of NVIDIA by 9.4% during the 3rd quarter. Formulate Financial LLC now owns 6,652 shares of the computer hardware maker's stock worth $1,519,000 after buying an additional 572 shares during the period. Summit Wealth Group LLC grew its stake in NVIDIA by 4.7% in the 3rd quarter. Summit Wealth Group LLC now owns 19,435 shares of the computer hardware maker's stock valued at $4,439,000 after buying an additional 870 shares during the last quarter. Finally, Trevian Wealth Management LLC grew its stake in NVIDIA by 10.3% in the 3rd quarter. Trevian Wealth Management LLC now owns 6,123 shares of the computer hardware maker's stock valued at $1,398,000 after buying an additional 572 shares during the last quarter. Institutional investors own 65.27% of the company's stock.

NVIDIA News Roundup

Here are the key news stories impacting NVIDIA this week:

• Positive Sentiment: NVIDIA’s underlying business remains strong: its latest reported quarter beat estimates, with revenue up 105.9% year over year. That growth may help support the stock if the controversy does not disrupt operations. Article: Jensen Huang Might Be the Biggest Wild Card for Nvidia Stock
• Positive Sentiment: The company also announced a South Korean AI-infrastructure collaboration with Rebellions and SK Telecom, extending use of NVIDIA’s NVLink platform. Article: NVIDIA, Rebellions and SK Telecom Announce Collaboration
• Neutral Sentiment: NVIDIA’s board has begun an independent investigation into reports that Huang was targeted by a foreign intelligence effort. The board said it has no reason to believe company secrets or national security were compromised; Huang says he is cooperating. The outcome remains uncertain. Article: Statement from NVIDIA Board of Directors
• Negative Sentiment: The investigation follows Huang’s admission of an affair with Alice Huang, a former executive at a company that buys NVIDIA chips, who U.S. intelligence reportedly suspects of links to Chinese intelligence. Investors are concerned about potential exposure of sensitive information, reputational damage, and complications for NVIDIA’s China business. Article: Nvidia Shares Slump on Spy Probe
• Negative Sentiment: Shareholder litigation and possible congressional scrutiny add legal and regulatory risks. Questions about Huang’s future also weigh on sentiment, as reports say NVIDIA has no clear public succession plan for its founder and long-serving CEO. Article: Nvidia’s CEO Turmoil Gives Democrats Fresh Ammunition for Oversight Article: Jensen Huang Affair Puts Nvidia’s Future at Risk

About NVIDIA

NVIDIA Corporation develops graphics processing units (GPUs), accelerated computing platforms and related software. Founded in 1993, the company first became widely known for GPUs used in PC gaming and professional graphics. Its technology now also supports artificial intelligence, scientific computing and other data-intensive applications.

NVIDIA's offerings include GeForce products for gaming, data-center GPUs and systems for AI workloads, and networking products that connect computing infrastructure.

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