NVIDIA (NASDAQ:NVDA) Stock Falls 3.2% - Time to Sell?

Key Points

• NVIDIA shares fell 3.2% to $200.13 on Wednesday, amid broader semiconductor weakness, an analyst downgrade, and concern that data-center construction could slow or become costlier.
• Investor risks include a high bar set by a reported $108 billion revenue guide and potential complications from reported restrictions on cloud partners’ sales to Chinese customers.
• Despite the pullback, analysts remain broadly bullish, with a consensus “Buy” rating and $318.85 price target; NVIDIA is also extending its reach through enterprise AI governance and automated-driving partnerships.

NVIDIA Corporation (NASDAQ:NVDA - Get Free Report)'s stock price dropped 3.2% during trading on Wednesday. The stock traded as low as $199.68 and last traded at $200.13. Approximately 147,431,292 shares traded hands during trading, a decline of 1% from the average session volume of 148,282,234 shares. The stock had previously closed at $206.69.

Key NVIDIA News

Here are the key news stories impacting NVIDIA this week:

• Positive Sentiment: NVIDIA’s OpenShell integration with ModelOp adds its technology to an enterprise AI governance platform, potentially broadening adoption of its software ecosystem. Article: ModelOp Unveils Industry-First Full-Stack AI Policy Enforcement With NVIDIA OpenShell
• Positive Sentiment: Aptiv and NVIDIA are expanding work on production-ready automated-driving systems, offering a potential growth avenue beyond data-center chips. Article: Aptiv Deepens Its Push Into Production Ready Automated Driving
• Neutral Sentiment: Reports say CEO Jensen Huang defended NVIDIA following a spy-investigation report. The article frames the pullback as a buying opportunity, but provides no clear indication that the report will affect the company’s business. Article: Jensen Huang Defends Nvidia After Spy Investigation Report
• Negative Sentiment: Investors are scrutinizing a reported $108 billion revenue guide as the next high bar for results. Elevated expectations may leave less room for disappointment. Article: Nvidia Stocks Decline as $108 Billion Guide Sets the Next Revenue Hurdle
• Negative Sentiment: Reports that NVIDIA is asking cloud partners to generate at least 51% of sales from non-Chinese customers could constrain some providers and complicate sales tied to China amid U.S. export rules. Article: Nvidia Is Telling Cloud Clients to Sell at Least 51% to Non-Chinese Customers
• Negative Sentiment: Democratic midterm victories prompted concerns that data-center construction could slow or become more expensive, contributing to weakness across semiconductor stocks. An analyst downgrade and a Melius Research price-target cut added pressure. Article: Why Is Nvidia Stock Falling While Broader Markets Rally?

Wall Street Analysts Forecast Growth

Several research firms have recently weighed in on NVDA. Oppenheimer set a $315.00 price objective on NVIDIA and gave the company an "outperform" rating in a research note on Thursday, August 27th. The Goldman Sachs Group reissued a "buy" rating on shares of NVIDIA in a research report on Wednesday, October 21st. 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 report on Monday, August 31st. Wells Fargo & Company set a $210.00 price target on shares of NVIDIA in a report on Friday, October 2nd. Finally, Evercore set a $465.00 price target on shares of NVIDIA and gave the company an "outperform" rating in a research report on Thursday, August 27th. Five equities research analysts have rated the stock with a Strong Buy rating, forty-eight have issued a Buy rating and one has issued a Hold rating to the company's stock. According to data from MarketBeat.com, the stock currently has an average rating of "Buy" and a consensus price target of $318.85.

NVIDIA Stock Performance

The stock has a 50 day simple moving average of $221.45 and a 200 day simple moving average of $204.44. The company has a market cap of $4.83 trillion, a price-to-earnings ratio of 25.31, a PEG ratio of 1.55 and a beta of 2.21. 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 earnings results on Wednesday, August 26th. The computer hardware maker reported $2.22 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $2.09 by $0.13. The business had revenue of $96.22 billion during the quarter, compared to analyst estimates of $92.27 billion. NVIDIA had a return on equity of 96.04% and a net margin of 63.66%. The company's revenue for the quarter was up 105.9% compared to the same quarter last year. During the same quarter last year, the firm earned $1.05 earnings per share. As a group, analysts predict that NVIDIA Corporation will post 9.30 EPS for the current year.

NVIDIA Dividend Announcement

The company also recently announced a quarterly dividend, which was paid on Thursday, October 1st. Stockholders of record on Thursday, September 10th were given a dividend of $0.25 per share. This represents a $1.00 dividend on an annualized basis and a dividend yield of 0.5%. The ex-dividend date of this dividend was Thursday, September 10th. NVIDIA's payout ratio is presently 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 billion in shares. This buyback authorization permits the computer hardware maker to buy up to 2.8% of its shares through open market purchases. Share buyback programs are often an indication that the company's board believes its stock is undervalued.

Insider Activity

In other NVIDIA news, CFO Colette Kress sold 34,918 shares of the business'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 owned 765,103 shares in the company, valued at $167,595,812.15. The trade was a 4.36% decrease in their position. The sale was disclosed in a filing with the SEC, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP Timothy S. Teter sold 30,460 shares of the company's 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 completion of the transaction, the executive vice president directly owned 2,687,660 shares of the company's stock, valued at approximately $598,810,648. The trade was a 1.12% decrease in their ownership of the stock. 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. Over the last three months, insiders sold 1,766,118 shares of company stock worth $399,450,353. 3.94% of the stock is currently owned by company insiders.

Institutional Trading of NVIDIA

A number of hedge funds and other institutional investors have recently modified their holdings of NVDA. State Street Corp grew its holdings in 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 valued at $202,047,568,000 after buying an additional 15,897,836 shares in the last quarter. Bank of America Corp DE lifted its holdings in shares of NVIDIA by 2.2% in the second quarter. Bank of America Corp DE now owns 195,366,864 shares of the computer hardware maker's stock worth $39,090,956,000 after buying an additional 4,165,875 shares in the last quarter. Amundi boosted its position in shares of 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 acquiring an additional 12,575,177 shares during the last quarter. Dimensional Fund Advisors LP boosted its position in shares of NVIDIA by 0.6% during the first quarter. Dimensional Fund Advisors LP now owns 94,521,253 shares of the computer hardware maker's stock worth $16,479,126,000 after acquiring an additional 555,221 shares during the last quarter. Finally, Deutsche Bank AG grew its stake in NVIDIA by 2.3% during the second quarter. Deutsche Bank AG now owns 91,954,159 shares of the computer hardware maker's stock valued at $18,399,108,000 after acquiring an additional 2,045,101 shares in the last quarter. 65.27% of the stock is owned by hedge funds and other institutional investors.

About NVIDIA

NVIDIA Corporation NASDAQ: NVDA is a technology company that designs graphics processing units (GPUs), accelerated computing platforms, networking products and related software. Its technologies support artificial intelligence, machine learning, scientific computing, data analytics, professional visualization and computer graphics.

The company's products include GeForce GPUs for gaming and personal computing, data center GPUs and systems for AI and high-performance computing, and networking solutions used to connect and manage large-scale computing infrastructure.

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