NVIDIA (NASDAQ:NVDA) Trading Down 1.8% - What's Next?

Key Points

• NVIDIA shares fell 1.8% intraday even after the company posted strong quarterly results, trading below the prior close as investors appeared to take profits after a big run-up in expectations.
• The company reported record Q1 revenue of $81.6 billion, up 85% year over year, with data center revenue of $75.2 billion up 92%, showing continued surging demand for AI infrastructure.
• NVIDIA also boosted shareholder returns by authorizing an additional $80 billion buyback and raising its quarterly dividend from $0.01 to $0.25 per share, while analysts largely remain bullish with an average Buy rating and a consensus price target of $298.58.

NVIDIA Corporation (NASDAQ:NVDA - Get Free Report)'s share price was down 1.8% during mid-day trading on Thursday . The company traded as low as $217.93 and last traded at $219.51. Approximately 201,219,182 shares were traded during trading, an increase of 18% from the average daily volume of 170,715,375 shares. The stock had previously closed at $223.47.

Key NVIDIA News

Here are the key news stories impacting NVIDIA this week:

• Positive Sentiment: NVIDIA reported record Q1 revenue of $81.6 billion, up 85% year over year, with data center revenue of $75.2 billion up 92%, reinforcing that AI infrastructure demand remains extremely strong.
• Positive Sentiment: The company lifted shareholder returns by authorizing an additional $80 billion buyback and increasing its quarterly dividend from $0.01 to $0.25 per share, which signals management confidence and should support the stock. Article Title
• Positive Sentiment: Several analysts raised price targets after the report, reflecting continued Wall Street optimism that NVIDIA can keep growing into its valuation.
• Neutral Sentiment: NVIDIA announced upcoming financial-community events, including a TD Cowen conference appearance on May 28, which keeps the company in front of investors but is not a major near-term catalyst. Article Title
• Neutral Sentiment: Management also unveiled the Vera Rubin platform and other new AI products, which strengthens the long-term growth story, but investors are waiting to see how quickly those ramps translate into revenue.
• Negative Sentiment: The stock failed to rally because expectations were extremely high, and some investors are concerned that near-term upside may be limited without an even bigger guidance surprise or clearer visibility on China and future AI spending.
• Negative Sentiment: Articles and commentary also point to competition risks, supply bottlenecks, and a “priced for perfection” setup, all of which can cap enthusiasm even after strong results.

Analysts Set New Price Targets

A number of brokerages have issued reports on NVDA. Deutsche Bank Aktiengesellschaft restated a "hold" rating and set a $255.00 price objective (up from $220.00) on shares of NVIDIA in a research report on Thursday. KeyCorp set a $310.00 price objective on NVIDIA and gave the company an "overweight" rating in a research report on Thursday. Citigroup began coverage on NVIDIA in a research report on Wednesday, April 15th. They set a "buy" rating on the stock. Itau BBA Securities restated a "market perform" rating on shares of NVIDIA in a research report on Thursday, February 26th. Finally, HSBC reissued a "buy" rating and issued a $325.00 target price (up from $295.00) on shares of NVIDIA in a research note on Tuesday. Four equities research analysts have rated the stock with a Strong Buy rating, forty-eight have issued a Buy rating and two have assigned a Hold rating to the stock. According to MarketBeat, the company presently has an average rating of "Buy" and a consensus price target of $298.58.

NVIDIA Stock Down 1.8%

The company has a market cap of $5.32 trillion, a PE ratio of 44.80, a P/E/G ratio of 0.69 and a beta of 2.25. The company's 50 day moving average is $194.82 and its 200 day moving average is $188.75. The company has a current ratio of 3.91, a quick ratio of 3.24 and a debt-to-equity ratio of 0.05.

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, topping the consensus estimate of $1.76 by $0.11. The company had revenue of $81.62 billion for the quarter, compared to the consensus estimate of $78.42 billion. NVIDIA had a net margin of 55.60% and a return on equity of 97.37%. The firm's revenue was up 85.2% compared to the same quarter last year. During the same quarter last year, the firm posted $0.81 EPS. As a group, analysts predict that NVIDIA Corporation will post 7.85 earnings per share for the current fiscal year.

NVIDIA Increases Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Friday, June 26th. Shareholders of record on Thursday, June 4th will be issued a dividend of $0.25 per share. This represents a $1.00 annualized dividend and a yield of 0.5%. The ex-dividend date is Thursday, June 4th. This is an increase from NVIDIA's previous quarterly dividend of $0.01. NVIDIA's dividend payout ratio (DPR) is 0.82%.

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

Insider Activity at NVIDIA

In other NVIDIA news, CFO Colette Kress sold 42,650 shares of the firm's stock in a transaction dated Friday, March 20th. The shares were sold at an average price of $174.89, for a total transaction 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 transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, Director Aarti S. Shah sold 19,000 shares of the firm's stock in a transaction dated Thursday, March 19th. The shares were sold at an average price of $176.71, for a total transaction of $3,357,490.00. Following the transaction, the director directly owned 36,007 shares in the company, valued at $6,362,796.97. This trade represents a 34.54% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold a total of 906,336 shares of company stock worth $162,802,518 over the last three months. Corporate insiders own 4.17% of the company's stock.

Institutional Inflows and Outflows

A number of institutional investors have recently added to or reduced their stakes in NVDA. State Street Corp grew its position in shares of NVIDIA by 1.2% in the 4th quarter. State Street Corp now owns 991,480,489 shares of the computer hardware maker's stock worth $184,911,111,000 after buying an additional 11,451,386 shares during the last quarter. Geode Capital Management LLC grew its position in shares of NVIDIA by 0.6% in the 4th quarter. Geode Capital Management LLC now owns 588,803,093 shares of the computer hardware maker's stock worth $109,446,217,000 after buying an additional 3,383,441 shares during the last quarter. Norges Bank purchased a new position in shares of NVIDIA in the 4th quarter worth approximately $62,244,133,000. Bank of America Corp DE grew its position in shares of NVIDIA by 2.1% in the 1st quarter. Bank of America Corp DE now owns 191,200,989 shares of the computer hardware maker's stock worth $33,345,453,000 after buying an additional 4,019,505 shares during the last quarter. Finally, Legal & General Group Plc grew its position in shares of NVIDIA by 1.5% in the 3rd quarter. Legal & General Group Plc now owns 181,203,035 shares of the computer hardware maker's stock worth $33,808,862,000 after buying an additional 2,609,560 shares during the last quarter. Hedge funds and other institutional investors own 65.27% of the company's stock.

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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