NVIDIA (NASDAQ:NVDA) Trading Down 1.4% - Here's Why

Key Points

• NVIDIA shares fell 1.4% on Thursday, trading between $192.35 and $194.83 as volume came in below average. The move came amid broader pressure on semiconductor and AI stocks, with some traders worried about valuations and technical support near the $200 level.
• Despite the pullback, Wall Street remains upbeat on NVIDIA. Recent analyst commentary included higher price targets from firms such as Daiwa, Bank of America, and Melius Research, with MarketBeat showing a consensus rating of “Buy” and an average target of $303.84.
• The company continues to post strong fundamentals and shareholder returns, beating quarterly earnings and revenue expectations while also raising its dividend and authorizing an $80 billion stock buyback. However, insider selling by directors and bearish bets from figures like Michael Burry added to market caution.

NVIDIA Corporation (NASDAQ:NVDA - Get Free Report)'s share price dropped 1.4% during trading on Thursday . The stock traded as low as $192.35 and last traded at $194.83. 139,557,238 shares changed hands during mid-day trading, a decline of 18% from the average daily volume of 169,795,688 shares. The stock had previously closed at $197.58.

NVIDIA News Roundup

Here are the key news stories impacting NVIDIA this week:

• Positive Sentiment: NVIDIA unveiled a new revenue-sharing model that lets AI startups trade compute access for a share of future profits, a move that could expand its customer base and make its ecosystem stickier. Nvidia offers start-up customers chance to swap compute power for revenue share
• Positive Sentiment: Analysts and commentators continue to highlight Nvidia as a top AI and semiconductor name, with several articles arguing the recent pullback is a buying opportunity and that the stock could recover meaningfully over the next 12 months. Price Prediction: Nvidia Could Hit $250 in 12 Months Despite AI Selloff
• Positive Sentiment: Multiple reports pointed to new AI/robotics opportunities tied to NVIDIA, including the Palantir sovereign AI partnership, the Agility Robotics launch partnership, and Valar Atomics’ reactor-powered Nvidia chip demo, reinforcing Nvidia’s central role in AI infrastructure. Valar nuclear startup partners with Nvidia on data center aiming to conserve water
• Neutral Sentiment: Nvidia also named Nicholas Parker to lead field operations, an internal leadership move that appears operational rather than a major financial catalyst. Nvidia names Nicholas Parker to lead field operations
• Negative Sentiment: Several pieces said NVDA remains under pressure from semiconductor profit-taking, a broader AI selloff, and concerns that valuations have gotten ahead of fundamentals, with technical traders warning of further downside if support breaks near the $200 area. Nvidia stock continues decline: what's hurting the AI darling?
• Negative Sentiment: Hedge-fund sentiment also looked like a headwind, with Michael Burry disclosed as betting against Nvidia and other chip stocks, adding to the market’s caution around AI-chip names. Big Short investor Michael Burry reveals fresh bets against Tesla, Nvidia, and Caterpillar

Wall Street Analyst Weigh In

Several analysts have recently commented on NVDA shares. Daiwa Securities Group increased their price target on shares of NVIDIA from $215.00 to $255.00 and gave the company an "outperform" rating in a research report on Friday, May 22nd. Weiss Ratings reaffirmed a "buy (b)" rating on shares of NVIDIA in a research note on Friday, April 10th. Wall Street Zen upgraded NVIDIA from a "buy" rating to a "strong-buy" rating in a report on Saturday, May 23rd. Melius Research set a $400.00 price target on NVIDIA in a research report on Thursday, May 21st. Finally, Bank of America reissued a "buy" rating and issued a $350.00 price target (up from $320.00) on shares of NVIDIA in a report on Thursday, May 21st. Three research analysts have rated the stock with a Strong Buy rating, forty-eight have assigned a Buy rating and three have assigned a Hold rating to the company's stock. According to data from MarketBeat, the company currently has an average rating of "Buy" and a consensus price target of $303.84.

NVIDIA Price Performance

The company has a 50 day moving average of $210.48 and a 200 day moving average of $193.36. The stock has a market capitalization of $4.71 trillion, a price-to-earnings ratio of 29.84, a price-to-earnings-growth ratio of 0.44 and a beta of 2.21. The company has a quick ratio of 2.85, a current ratio of 3.44 and a debt-to-equity ratio of 0.04.

NVIDIA (NASDAQ:NVDA - Get Free Report) last issued its quarterly earnings results on Wednesday, May 20th. The computer hardware maker reported $1.87 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $1.76 by $0.11. NVIDIA had a return on equity of 96.94% and a net margin of 62.97%.The firm had revenue of $81.61 billion for the quarter, compared to analyst estimates of $78.42 billion. During the same period last year, the company earned $0.81 EPS. The firm's quarterly revenue was up 85.2% on a year-over-year basis. As a group, equities research analysts forecast that NVIDIA Corporation will post 8.69 EPS for the current fiscal year.

NVIDIA Increases Dividend

The business also recently announced a quarterly dividend, which was paid on Friday, June 26th. Investors of record on Thursday, June 4th were issued a $0.25 dividend. The ex-dividend date was Thursday, June 4th. This is a positive change from NVIDIA's previous quarterly dividend of $0.01. This represents a $1.00 dividend on an annualized basis and a yield of 0.5%. NVIDIA's payout ratio is presently 15.31%.

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

Insiders Place Their Bets

In other NVIDIA news, Director Stephen C. Neal sold 15,500 shares of NVIDIA stock in a transaction on Wednesday, June 3rd. The shares were sold at an average price of $215.73, for a total value of $3,343,815.00. Following the transaction, the director owned 116,135 shares in the company, valued at $25,053,803.55. This trade represents a 11.77% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. Also, Director Mark A. Stevens sold 885,000 shares of the business's stock in a transaction on Thursday, June 18th. The shares were sold at an average price of $210.17, for a total transaction of $186,000,450.00. Following the sale, the director directly owned 5,207,271 shares of the company's stock, valued at $1,094,412,146.07. This represents a 14.53% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold a total of 1,901,125 shares of company stock valued at $410,583,015 over the last quarter. Company insiders own 3.94% of the company's stock.

Institutional Investors Weigh In On NVIDIA

Several institutional investors and hedge funds have recently added to or reduced their stakes in NVDA. Norges Bank acquired a new stake in shares of NVIDIA in the fourth quarter valued at about $62,244,133,000. J. Stern & Co. LLP raised its stake in shares of NVIDIA by 13,709.1% in the 4th quarter. J. Stern & Co. LLP now owns 125,760,307 shares of the computer hardware maker's stock valued at $23,454,297,000 after purchasing an additional 124,849,603 shares in the last quarter. Cardano Risk Management B.V. raised its stake in NVIDIA by 896.4% during the fourth quarter. Cardano Risk Management B.V. now owns 78,123,960 shares of the computer hardware maker's stock valued at $14,570,119,000 after buying an additional 70,283,539 shares in the last quarter. Capital Research Global Investors lifted its stake in NVIDIA by 16.1% during the third quarter. Capital Research Global Investors now owns 165,377,852 shares of the computer hardware maker's stock worth $30,855,564,000 after purchasing an additional 22,896,705 shares during the last quarter. Finally, Laurel Wealth Advisors LLC grew its position in shares of NVIDIA by 15,496.1% during the 2nd quarter. Laurel Wealth Advisors LLC now owns 21,865,525 shares of the computer hardware maker's stock valued at $3,454,534,000 after buying an additional 21,725,326 shares during the last quarter. 65.27% of the stock is currently owned by institutional investors and hedge funds.

NVIDIA Company Profile

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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