NVIDIA (NASDAQ:NVDA) Shares Down 1.9% After Analyst Downgrade

Key Points

• NVIDIA shares fell 1.9% after New Street Research trimmed its price target slightly from $343 to $340, even as the stock remained near recent highs.
• The company’s latest earnings were strong, with $81.62 billion in quarterly revenue and $1.87 EPS both beating expectations, while revenue jumped 85.2% year over year.
• NVIDIA’s board approved a major $80 billion share buyback and raised its quarterly dividend to $0.25 per share, signaling confidence in future cash generation.

NVIDIA Corporation (NASDAQ:NVDA - Get Free Report) shares were down 1.9% on Friday after New Street Research lowered their price target on the stock from $343.00 to $340.00. The stock traded as low as $214.80 and last traded at $215.33. Approximately 166,290,478 shares traded hands during trading, a decline of 3% from the average daily volume of 170,684,719 shares. The stock had previously closed at $219.51.

Several other analysts have also commented on the stock. Rosenblatt Securities reissued a "buy" rating and set a $325.00 price objective on shares of NVIDIA in a research note on Thursday. Tigress Financial reissued a "strong-buy" rating and set a $360.00 price objective (up from $350.00) on shares of NVIDIA in a research note on Thursday, March 5th. Melius Research set a $400.00 price objective on shares of NVIDIA in a research note on Thursday. Morgan Stanley set a $288.00 price objective on shares of NVIDIA and gave the company an "overweight" rating in a research note on Thursday. Finally, Daiwa Securities Group upped their price objective on shares of NVIDIA from $215.00 to $255.00 and gave the company an "outperform" rating in a research note on Friday. Four equities research analysts have rated the stock with a Strong Buy rating, forty-eight have given a Buy rating and two have issued a Hold rating to the company's stock. According to MarketBeat.com, the stock presently has a consensus rating of "Buy" and a consensus target price of $303.27.

Insiders Place Their Bets

In other news, CFO Colette Kress sold 42,650 shares of the firm's stock in a transaction on Friday, March 20th. The shares were sold at an average price of $174.89, for a total value of $7,459,058.50. Following the transaction, the chief financial officer owned 881,387 shares of the company's stock, valued at approximately $154,145,772.43. This trade represents a 4.62% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available at this link. Also, EVP Ajay K. Puri sold 300,000 shares of the firm's stock in a transaction on Wednesday, March 18th. The shares were sold at an average price of $182.25, for a total transaction of $54,675,000.00. Following the sale, the executive vice president directly owned 3,018,547 shares of the company's stock, valued at approximately $550,130,190.75. The trade was a 9.04% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last 90 days, insiders have sold 906,336 shares of company stock worth $162,802,518. 4.17% of the stock is owned by company insiders.

Key Stories Impacting NVIDIA

Here are the key news stories impacting NVIDIA this week:

• Positive Sentiment: Record Q1 results showed NVIDIA’s AI demand remains exceptional, with data center revenue hitting $75.2 billion and margins staying around 75%.
• Positive Sentiment: The board authorized an additional $80 billion share repurchase program, signaling confidence in future cash generation.
• Positive Sentiment: Analysts largely turned more bullish after earnings, with multiple firms raising price targets and maintaining buy or outperform ratings.
• Positive Sentiment: New product and ecosystem announcements, including the Vera Rubin platform and expanded AI partnerships, reinforce NVIDIA’s leadership beyond hyperscalers.

Institutional Investors Weigh In On NVIDIA

Large investors have recently added to or reduced their stakes in the company. Lifetime Wealth Management P.C. acquired a new position in NVIDIA during the 4th quarter worth $26,000. Longview Financial Advisors Inc. acquired a new position in NVIDIA during the 1st quarter worth $27,000. Longfellow Investment Management Co. LLC grew its holdings in NVIDIA by 47.9% during the 2nd quarter. Longfellow Investment Management Co. LLC now owns 207 shares of the computer hardware maker's stock worth $33,000 after acquiring an additional 67 shares in the last quarter. Phillip James Consulting Co. acquired a new position in NVIDIA during the 1st quarter worth $40,000. Finally, Spurstone Advisory Services LLC acquired a new position in NVIDIA during the 2nd quarter worth $40,000. 65.27% of the stock is owned by institutional investors and hedge funds.

NVIDIA Stock Performance

The company has a market capitalization of $5.22 trillion, a price-to-earnings ratio of 32.98, a price-to-earnings-growth ratio of 0.69 and a beta of 2.25. The company has a debt-to-equity ratio of 0.05, a quick ratio of 3.24 and a current ratio of 3.91. The company's fifty day simple moving average is $195.51 and its two-hundred day simple moving average is $188.87.

NVIDIA (NASDAQ:NVDA - Get Free Report) last posted its quarterly earnings results on Wednesday, May 20th. The computer hardware maker reported $1.87 EPS for the quarter, beating the consensus estimate of $1.76 by $0.11. NVIDIA had a net margin of 62.97% and a return on equity of 110.48%. The business had revenue of $81.62 billion during the quarter, compared to analyst estimates of $78.42 billion. During the same period in the previous year, the business posted $0.81 EPS. The company's quarterly revenue was up 85.2% on a year-over-year basis. Equities research analysts predict that NVIDIA Corporation will post 7.89 earnings per share for the current fiscal year.

NVIDIA Increases Dividend

The firm also recently declared a quarterly dividend, which will be paid on Friday, June 26th. Stockholders of record on Thursday, June 4th will be issued a $0.25 dividend. This is a boost from NVIDIA's previous quarterly dividend of $0.01. The ex-dividend date of this dividend is Thursday, June 4th. This represents a $1.00 annualized dividend and a dividend yield of 0.5%. NVIDIA's dividend payout ratio (DPR) is presently 0.82%.

NVIDIA declared that its board has approved a stock buyback plan on Wednesday, May 20th that allows the company to repurchase $80.00 billion in shares. This repurchase authorization allows the computer hardware maker to repurchase up to 1.5% of its shares through open market purchases. Shares repurchase plans are generally a sign that the company's board believes its stock is undervalued.

About NVIDIA

NVIDIA Corporation, founded in 1993 and headquartered in Santa Clara, California, is a global technology company that designs and develops graphics processing units (GPUs) and system-on-chip (SoC) technologies. Co-founded by Jensen Huang, who serves as president and chief executive officer, along with Chris Malachowsky and Curtis Priem, NVIDIA has grown from a graphics-focused chipmaker into a broad provider of accelerated computing hardware and software for multiple industries.

The company's product portfolio spans discrete GPUs for gaming and professional visualization (marketed under the GeForce and NVIDIA RTX lines), high-performance data center accelerators used for AI training and inference (including widely adopted platforms such as the A100 and H100 series), and Tegra SoCs for automotive and edge applications.

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