NVIDIA (NASDAQ:NVDA) Stock Falls 2.9% - What's Next?

Key Points

• NVIDIA shares fell 2.9% to $230.48 amid a broader AI-stock selloff, sparked partly by reports that OpenAI’s annualized revenue was about $50 billion—below previously circulated estimates—and concerns about AI monetization and infrastructure spending.
• The company continues to report strong AI-related demand, including a potential $40 billion SpaceX GPU-financing deal, wider adoption of RTX Spark chips in AI-focused PCs, and a $1 billion commitment to U.S. scientific research. However, selective AI funding and competition in networking remain risks.
• Analysts remain broadly bullish, with a consensus “Buy” rating and a $321.89 target price, while NVIDIA reported 105.9% year-over-year revenue growth in its latest quarter and authorized a $150 billion share-repurchase program.

NVIDIA Corporation (NASDAQ:NVDA - Get Free Report)'s stock price dropped 2.9% during mid-day trading on Thursday. The stock traded as low as $229.85 and last traded at $230.48. 114,270,318 shares were traded during trading, a decline of 25% from the average session volume of 152,876,109 shares. The stock had previously closed at $237.47.

Key NVIDIA News

Here are the key news stories impacting NVIDIA this week:

• Positive Sentiment: NVIDIA committed $1 billion over five years to advance U.S. scientific research in areas including quantum computing, healthcare and energy security. The announcement was part of a broader $2.4 billion technology-industry commitment to support federal AI research. NVIDIA Commits $1 Billion to Advance US Science
• Positive Sentiment: SpaceX is reportedly seeking approximately $40 billion in debt financing to purchase NVIDIA GPUs for its AI buildout. If completed, the deal would represent substantial potential demand, although the financing remains under discussion. Apollo, banks in talks to finance SpaceX's Nvidia GPU purchase
• Positive Sentiment: Microsoft and multiple PC manufacturers unveiled or began taking preorders for AI-focused systems using NVIDIA’s RTX Spark chips, expanding the company’s opportunity beyond data centers into local and enterprise computing. Microsoft to sell Surface Laptop Ultra containing Nvidia AI chip
• Positive Sentiment: BNP Paribas Exane upgraded NVIDIA to “strong buy,” while several reports cited optimistic analyst targets and sustained AI demand. TSMC’s quarterly revenue also rose 50% year over year, reinforcing demand for advanced AI processors. NVIDIA Stock Lifted to Strong-Buy by BNP Paribas Exane
• Neutral Sentiment: NVIDIA is increasingly financing or backstopping AI infrastructure projects. This could stimulate GPU sales and strengthen its ecosystem, but it also exposes the company to customer-credit and residual-value risks if AI spending or hardware utilization weakens. Nvidia: AI's Lender of Last Resort
• Negative Sentiment: AI stocks sold off after CNBC reported that OpenAI’s annualized revenue was approximately $50 billion at the end of September—below the $68 billion figure widely circulated previously. The revision raised concerns about AI monetization and the sustainability of aggressive infrastructure spending. Nvidia, Oracle, CoreWeave and other AI stocks sink on OpenAI revenue report
• Negative Sentiment: Demand concerns were reinforced by reports of sharply weaker appetite for an NVIDIA-backed data-center company’s IPO, suggesting that AI funding conditions may be becoming more selective. Investors are also monitoring competition from open Ethernet networking platforms that could challenge NVIDIA’s proprietary InfiniBand advantage.

Analyst Ratings Changes

A number of brokerages recently issued reports on NVDA. Itau BBA Securities lowered their price target on NVIDIA from $256.00 to $218.00 in a report on Wednesday, June 24th. KeyCorp restated an "overweight" rating and issued a $330.00 target price on shares of NVIDIA in a report on Monday, August 24th. BMO Capital Markets set a $340.00 price target on shares of NVIDIA and gave the stock an "outperform" rating in a research note on Thursday, August 20th. Deutsche Bank Aktiengesellschaft reissued a "buy" rating on shares of NVIDIA in a research report on Monday, August 31st. Finally, UBS Group set a $300.00 price objective on NVIDIA and gave the stock a "buy" rating in a report on Thursday, August 27th. Five investment analysts have rated the stock with a Strong Buy rating, forty-nine have assigned a Buy rating and one has assigned a Hold rating to the stock. Based on data from MarketBeat.com, the company has an average rating of "Buy" and a consensus target price of $321.89.

NVIDIA Stock Down 2.9%

The firm has a market capitalization of $5.55 trillion, a PE ratio of 29.14, a price-to-earnings-growth ratio of 1.85 and a beta of 2.22. The company has a current ratio of 4.59, a quick ratio of 3.85 and a debt-to-equity ratio of 0.14. The firm has a 50-day moving average of $221.38 and a two-hundred day moving average of $208.88.

NVIDIA (NASDAQ:NVDA - Get Free Report) last posted its quarterly earnings results 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. The firm had revenue of $96.22 billion for the quarter, compared to analyst estimates of $92.27 billion. NVIDIA had a net margin of 63.66% and a return on equity of 96.04%. NVIDIA's revenue for the quarter was up 105.9% compared to the same quarter last year. During the same quarter last year, the firm posted $1.05 earnings per share. On average, equities research analysts forecast that NVIDIA Corporation will post 9.25 EPS for the current year.

NVIDIA Announces Dividend

The firm also recently announced 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. This represents a $1.00 annualized dividend and a yield of 0.4%. The ex-dividend date of this dividend was Thursday, September 10th. NVIDIA's payout ratio is 12.64%.

NVIDIA announced that its board has initiated a share repurchase plan on Monday, September 28th that permits the company to buyback $150.00 billion in shares. This buyback authorization permits the computer hardware maker to reacquire up to 2.8% of its shares through open market purchases. Shares buyback plans are typically an indication that the company's management believes its shares are undervalued.

Insider Activity at NVIDIA

In other NVIDIA news, EVP Timothy S. Teter sold 30,460 shares of the 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 sale, 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 position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Mark A. Stevens sold 622,239 shares of the stock in a transaction on Friday, September 4th. The shares were sold at an average price of $231.62, for a total value of $144,122,997.18. Following the completion of the transaction, the director owned 2,336,531 shares in the company, valued at $541,187,310.22. The trade was a 21.03% 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 1,766,118 shares of company stock valued at $399,450,353 over the last quarter. 3.94% of the stock is owned by company insiders.

Institutional Inflows and Outflows

Several hedge funds have recently modified their holdings of the business. Montgomery Financial Services LLC bought a new position in shares of NVIDIA in the 2nd quarter worth $28,000. Lifetime Wealth Management P.C. bought a new stake in NVIDIA in the fourth quarter valued at about $26,000. Longview Financial Advisors Inc. acquired a new position in NVIDIA in the first quarter valued at about $27,000. Phillip James Consulting Co. acquired a new position in NVIDIA in the first quarter valued at about $40,000. Finally, Bard Associates Inc. boosted its holdings in NVIDIA by 8,866.7% during the second quarter. Bard Associates Inc. now owns 269 shares of the computer hardware maker's stock worth $54,000 after buying an additional 266 shares during the last quarter. Institutional investors own 65.27% of the company's stock.

NVIDIA Company Profile

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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