NVIDIA (NASDAQ:NVDA) Shares Down 1.8% - Here's What Happened

Key Points

• NVIDIA shares fell 1.8% to $217.23 amid higher Treasury yields, hotter inflation data and concerns about the affordability of AI infrastructure spending by debt-heavy customers.
• The company continues to report strong demand, with expanded partnerships involving Volvo and Adobe, new government and enterprise initiatives, and QumulusAI placing $71.9 million of NVIDIA B300 GPUs into production.
• Analysts remain broadly bullish, assigning the stock an average “Buy” rating and a consensus price target of $321.89, while NVIDIA’s latest quarterly revenue rose 105.9% year over year and its board authorized a $150 billion share-repurchase program.

NVIDIA Corporation (NASDAQ:NVDA - Get Free Report)'s share price dropped 1.8% during trading on Thursday. The stock traded as low as $212.85 and last traded at $217.23. 125,481,148 shares traded hands during mid-day trading, a decline of 17% from the average session volume of 151,482,672 shares. The stock had previously closed at $221.30.

NVIDIA News Summary

Here are the key news stories impacting NVIDIA this week:

• Positive Sentiment: Volvo expanded its long-running partnership with NVIDIA, selecting three NVIDIA hardware and software components for future automated-driving systems designed for urban and highway use. The deal strengthens NVIDIA’s position in automotive and “physical AI.” Volvo Cars expands automated driving partnership with NVIDIA
• Positive Sentiment: Adobe expanded its collaboration with NVIDIA to optimize Photoshop, Premiere, Substance 3D, Frame.io and Brand Concierge, supporting faster AI-powered content creation and personalization. Adobe and NVIDIA Expand Collaboration
• Positive Sentiment: Germany is reportedly planning an AI cooperation agreement with NVIDIA, while LSEG is using NVIDIA GPUs to accelerate analysis of its large market-data history. These initiatives broaden enterprise and government demand for NVIDIA’s platforms. Germany plans AI cooperation deal with NVIDIA
• Positive Sentiment: QumulusAI placed the final NVIDIA B300 GPUs from a $71.9 million, three-year agreement into production and said customer contracts exceed $500 million, offering evidence that some neocloud demand is converting into revenue. QumulusAI Puts Blackwell Agreement into Production
• Neutral Sentiment: NVIDIA committed $250 million in computing resources over five years for U.K. AI safety research. The initiative may strengthen NVIDIA’s ecosystem and reputation, but it represents an expense rather than near-term revenue. NVIDIA pledges $250 million for UK AI safety research
• Negative Sentiment: Higher Treasury yields and hotter inflation data are driving investors away from high-growth technology shares. Markets are also questioning whether debt-heavy neocloud customers can afford continued AI infrastructure spending, raising concerns about the sustainability and timing of NVIDIA’s demand. Rate Pressure Versus AI Demand
• Negative Sentiment: Competition is intensifying from AMD, custom accelerators and Microsoft’s Maia architecture, while reports that NVIDIA’s China AI-chip share has fallen as Huawei gains ground add to geopolitical and market-share concerns.
• Negative Sentiment: CEO Jensen Huang’s comments that NVIDIA could stop supplying customers developing unsafe AI may improve long-term trust, but investors see potential regulatory, reputational and revenue constraints if such restrictions affect major customers. Jensen Huang discusses AI safety

Analysts Set New Price Targets

Several analysts have recently commented on NVDA shares. Rothschild & Co Redburn increased their price target on shares of NVIDIA from $300.00 to $325.00 in a research report on Thursday, August 27th. Daiwa Securities Group cut their price objective on NVIDIA from $255.00 to $245.00 and set an "outperform" rating for the company in a research report on Thursday, September 17th. Wedbush increased their target price on NVIDIA from $330.00 to $345.00 and gave the company an "outperform" rating in a report on Thursday, August 27th. Melius Research set a $420.00 target price on NVIDIA in a report on Thursday, August 27th. Finally, DA Davidson restated a "buy" rating and issued a $300.00 price objective on shares of NVIDIA in a research report on Thursday, August 27th. Five research analysts have rated the stock with a Strong Buy rating, forty-nine have given a Buy rating and one has assigned a Hold rating to the company's stock. Based on data from MarketBeat.com, the stock has an average rating of "Buy" and a consensus target price of $321.89.

NVIDIA Price Performance

The company has a 50 day moving average of $223.43 and a 200 day moving average of $210.73. The stock has a market capitalization of $5.24 trillion, a price-to-earnings ratio of 27.46, a price-to-earnings-growth ratio of 1.77 and a beta of 2.22. The company has a quick ratio of 3.85, a current ratio of 4.59 and a debt-to-equity ratio of 0.14.

NVIDIA (NASDAQ:NVDA - Get Free Report) last posted 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. NVIDIA had a net margin of 63.66% and a return on equity of 96.04%. The company had revenue of $96.22 billion during the quarter, compared to the consensus estimate of $92.27 billion. During the same quarter in the prior year, the company posted $1.05 EPS. The company's quarterly revenue was up 105.9% compared to the same quarter last year. As a group, equities research analysts forecast that NVIDIA Corporation will post 9.25 EPS for the current fiscal year.

NVIDIA Announces Dividend

The company also recently declared a quarterly dividend, which was paid on Thursday, October 1st. Shareholders of record on Thursday, September 10th were paid a dividend of $0.25 per share. The ex-dividend date was Thursday, September 10th. This represents a $1.00 annualized dividend and a yield of 0.5%. NVIDIA's dividend payout ratio is currently 12.64%.

NVIDIA declared that its board has approved a share repurchase program on Monday, September 28th that permits the company to buy back $150.00 billion in shares. This repurchase authorization permits the computer hardware maker to buy up to 2.8% of its stock through open market purchases. Stock repurchase programs are usually an indication that the company's management believes its shares are undervalued.

Insider Activity

In other news, Director Mark Stevens sold 622,239 shares of NVIDIA stock in a transaction dated Friday, September 4th. The stock was sold at an average price of $231.62, for a total value of $144,122,997.18. Following the transaction, 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 transaction was disclosed in a document filed with the SEC, which is available at this link. Also, CFO Colette Kress sold 34,918 shares of the stock in a transaction that occurred on 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 sale, the chief financial officer directly owned 765,103 shares of the company's stock, valued at approximately $167,595,812.15. This trade represents a 4.36% decrease in their position. 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. Corporate insiders own 3.94% of the company's stock.

Institutional Trading of NVIDIA

Several large investors have recently added to or reduced their stakes in the stock. State Street Corp lifted its holdings in shares of NVIDIA by 1.6% in the 2nd quarter. State Street Corp now owns 1,009,783,437 shares of the computer hardware maker's stock worth $202,047,568,000 after purchasing an additional 15,897,836 shares in the last quarter. Bank of America Corp DE increased its stake in NVIDIA by 2.2% during the 2nd quarter. Bank of America Corp DE now owns 195,366,864 shares of the computer hardware maker's stock valued at $39,090,956,000 after purchasing an additional 4,165,875 shares in the last quarter. Invesco Ltd. increased its stake in NVIDIA by 0.3% during the 4th quarter. Invesco Ltd. now owns 143,239,504 shares of the computer hardware maker's stock valued at $26,714,167,000 after purchasing an additional 446,178 shares in the last quarter. Amundi raised its holdings in NVIDIA by 10.4% during the first quarter. Amundi now owns 133,768,018 shares of the computer hardware maker's stock worth $23,329,141,000 after buying an additional 12,575,177 shares during the last quarter. Finally, J. Stern & Co. LLP lifted its stake in shares of NVIDIA by 13,709.1% in the fourth 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 buying an additional 124,849,603 shares in the last quarter. 65.27% of the stock is currently owned by institutional investors and hedge funds.

About NVIDIA

NVIDIA Corporation is a technology company that designs accelerated computing platforms, graphics processing units (GPUs), central processing units (CPUs), networking products and related software. Its technologies are used in artificial intelligence, data centers, scientific and technical computing, gaming, professional visualization, automotive systems and robotics.

The company's products include GeForce GPUs and gaming software, data center computing platforms, networking solutions, and enterprise software for AI development and deployment.

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