NVIDIA (NASDAQ:NVDA) Shares Down 5.5% After Analyst Downgrade

Key Points

• NVIDIA shares fell 5.5% after Citi cut its price target from $315 to $285, while maintaining a Buy rating. Trading volume was about 178% above its daily average.
• Analyst sentiment remained broadly positive: MarketBeat reported a consensus Buy rating and an average price target of $318.75.
• NVIDIA’s latest reported quarter beat earnings and revenue estimates, with revenue up 105.9% year over year; the board also approved a $150 billion share-repurchase program.

NVIDIA Corporation (NASDAQ:NVDA - Get Free Report)'s share price fell 5.5% during trading on Tuesday after Citigroup lowered their price target on the stock from $315.00 to $285.00. Citigroup currently has a buy rating on the stock. NVIDIA traded as low as $165.89 and last traded at $168.9310. 421,565,527 shares changed hands during mid-day trading, an increase of 178% from the average daily volume of 151,840,688 shares. The stock had previously closed at $178.67.

A number of other equities analysts have also recently issued reports on NVDA. Oppenheimer set a $315.00 price target on NVIDIA and gave the stock an "outperform" rating in a report on Thursday, August 27th. KGI Securities lifted their price objective on shares of NVIDIA from $335.00 to $345.00 in a research note on Thursday, August 27th. Daiwa Securities Group dropped their target price 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. China Renaissance increased their target price on shares of NVIDIA from $319.00 to $330.00 and gave the stock a "buy" rating in a research note on Monday, August 31st. Finally, DZ Bank reaffirmed a "buy" rating on shares of NVIDIA in a research note on Wednesday, August 26th. Five analysts have rated the stock with a Strong Buy rating, forty-eight have given a Buy rating and two have given a Hold rating to the company. According to data from MarketBeat.com, the company presently has a consensus rating of "Buy" and a consensus price target of $318.75.

Insiders Place Their Bets

In other NVIDIA news, CFO Colette Kress sold 34,918 shares of the firm's stock in a transaction on Thursday, September 17th. The shares were sold at an average price of $219.05, for a total value of $7,648,787.90. Following the transaction, 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 ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP Timothy Teter sold 30,460 shares of NVIDIA stock in a transaction dated Monday, September 21st. The shares were sold at an average price of $222.80, for a total transaction of $6,786,488.00. Following the transaction, the executive vice president owned 2,687,660 shares of the company's stock, valued at $598,810,648. This represents a 1.12% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last 90 days, insiders have sold 1,766,118 shares of company stock worth $399,450,353. Insiders own 3.94% of the company's stock.

Key Stories Impacting NVIDIA

Here are the key news stories impacting NVIDIA this week:

• Positive Sentiment: Some analysts remain bullish: Citi cut its price target to $285 but kept a Buy rating, while Wells Fargo lowered its target to $300 and maintained Overweight. Cathie Wood’s funds were also reported to have added shares during the sell-off. Read More.
• Positive Sentiment: A partnership with South Korea’s Rebellions and SK Telecom will use NVIDIA’s NVLink Fusion and infrastructure for AI systems, supporting the company’s push to remain central to AI deployments. Read More.
• Neutral Sentiment: NVIDIA’s independent directors have retained outside counsel to investigate whether CEO Jensen Huang was targeted in a foreign intelligence effort. The board has said it has no reason to believe company secrets or national security were compromised; the investigation’s findings remain unknown. Read More.
• Negative Sentiment: Reports allege that Huang’s ties to Alice Huang, a businesswoman suspected by U.S. officials of working with Chinese intelligence, helped facilitate $7.5 billion in NVIDIA chip shipments to China. The claim has not been independently verified in the cited reporting, but it raises the prospect of export-control scrutiny and renewed restrictions on China sales. Read More.
• Negative Sentiment: Shareholder securities lawsuits have been filed, alleging investors were not adequately informed about risks related to the controversy. Multiple law firms are publicizing the cases, adding reputational and legal uncertainty. Read More.
• Negative Sentiment: Investors are also weighing key-person risk: Huang is closely identified with NVIDIA, and reports say the company lacks a clear public succession plan. Broader AI-market weakness, high Treasury yields and concerns about memory costs and margins add pressure. Read More.

Institutional Trading of NVIDIA

Hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Jupiter Topco LLC purchased a new position in NVIDIA in the second quarter valued at about $16,156,076,000. Van ECK Associates Corp lifted its position in shares of NVIDIA by 34.7% during the 2nd quarter. Van ECK Associates Corp now owns 75,849,721 shares of the computer hardware maker's stock valued at $15,176,771,000 after buying an additional 19,522,304 shares during the last quarter. Mirae Asset Global Investments Co. Ltd. bought a new position in shares of NVIDIA during the 3rd quarter worth $3,921,459,000. State Street Corp grew its stake in shares of NVIDIA by 1.6% during 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 acquiring an additional 15,897,836 shares during the period. Finally, Amundi grew its stake in shares of NVIDIA by 10.4% during the 1st quarter. Amundi now owns 133,768,018 shares of the computer hardware maker's stock worth $23,329,141,000 after acquiring an additional 12,575,177 shares during the period. 65.27% of the stock is owned by institutional investors.

NVIDIA Trading Down 5.5%

The firm has a fifty day moving average of $219.03 and a two-hundred day moving average of $204.50. The company has a market cap of $4.07 trillion, a PE ratio of 21.36, a price-to-earnings-growth ratio of 1.54 and a beta of 2.21. The company has a current ratio of 4.59, a quick ratio of 3.85 and a debt-to-equity ratio of 0.14.

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 the consensus estimate of $2.09 by $0.13. NVIDIA had a net margin of 63.66% and a return on equity of 96.04%. The business had revenue of $96.22 billion for the quarter, compared to the consensus estimate of $92.27 billion. During the same period in the prior year, the firm earned $1.05 earnings per share. The company's revenue was up 105.9% compared to the same quarter last year. As a group, sell-side analysts predict that NVIDIA Corporation will post 9.30 EPS for the current year.

NVIDIA Announces Dividend

The business also recently announced a quarterly dividend, which was paid on Thursday, October 1st. Shareholders of record on Thursday, September 10th were given a dividend of $0.25 per share. The ex-dividend date was Thursday, September 10th. This represents a $1.00 annualized dividend and a dividend yield of 0.6%. NVIDIA's dividend payout ratio is currently 12.64%.

NVIDIA declared that its board has approved a share buyback program on Monday, September 28th that authorizes the company to repurchase $150 billion in shares. This repurchase authorization authorizes the computer hardware maker to purchase up to 2.8% of its shares through open market purchases. Share repurchase programs are usually a sign that the company's board believes its stock is undervalued.

NVIDIA Company Profile

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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