NVIDIA (NASDAQ:NVDA) Stock Price Down 1.2% - Should You Sell?

Key Points

• NVIDIA shares fell 1.2% to $215.38, despite strong underlying demand signals, including expanded partnerships with Meta and Oracle and continued AI infrastructure spending.
• Analysts remain broadly bullish, with a consensus “Buy” rating and a $321.47 price target; NVIDIA also reported revenue growth of 105.9% year over year and authorized a $150 billion stock-repurchase program.
• Key risks include potential DOJ delays to the Hugging Face acquisition, increasing competition from Google’s TPUs, rising TSMC manufacturing costs, and possible moderation in AI spending. Investors will watch the November 17 earnings call for guidance on demand, margins and supply constraints.

NVIDIA Corporation (NASDAQ:NVDA - Get Free Report) shares were down 1.2% on Wednesday. The stock traded as low as $214.47 and last traded at $215.38. Approximately 89,765,552 shares changed hands during mid-day trading, a decline of 40% from the average daily volume of 148,949,234 shares. The stock had previously closed at $217.94.

Trending Headlines about NVIDIA

Here are the key news stories impacting NVIDIA this week:

• Positive Sentiment: NVIDIA will invest $3 billion in Meta’s equity offering while expanding its partnership on Meta’s Muse AI models. Meta also plans to deploy more NVIDIA Vera Rubin systems, Vera CPUs, Spectrum-X networking and BlueField-4 technology, reinforcing demand from one of NVIDIA’s largest customers. Nvidia, Meta partner on Muse agent as Nvidia invests $3 billion
• Positive Sentiment: NVIDIA and Oracle expanded the availability of Vera Rubin systems and CPUs on Oracle Cloud at multi-gigawatt scale, potentially broadening the company’s cloud infrastructure revenue opportunity. NVIDIA and Oracle Expand NVIDIA Vera Rubin
• Positive Sentiment: Continued demand indicators remain strong: analysts point to supply constraints, major hyperscaler infrastructure spending and an ongoing AI-compute shortage. NVIDIA also released an open-weight transcription model covering up to 40 languages, expanding its software and AI-model ecosystem. Nvidia releases new open transcription model
• Neutral Sentiment: NVIDIA scheduled its third-quarter financial-results conference call for November 17. Investors will focus on forward guidance, data-center demand, margins and supply constraints. NVIDIA Sets Conference Call for Third-Quarter Financial Results
• Negative Sentiment: The U.S. Department of Justice is examining NVIDIA’s proposed $12.93 billion acquisition of Hugging Face, creating potential regulatory delay or deal-completion risk. US DOJ examines Nvidia’s Hugging Face acquisition
• Negative Sentiment: Google’s TPUs are gaining distribution through Oracle Cloud, while OpenAI is reportedly purchasing Google’s custom chips. The developments could diversify customers away from NVIDIA GPUs and reduce NVIDIA’s pricing power over time. Google's AI chip business is getting harder for Nvidia to ignore
• Negative Sentiment: TSMC reportedly plans to raise advanced-packaging prices by 10% to 20% and wafer prices by 3% to 6%, potentially pressuring NVIDIA’s costs and gross margins. A bearish analysis also cut its price target to $200, citing possible moderation in AI spending and future earnings revisions. Nvidia: Risk Building, Earnings Revisions Can Turn Negative

Analysts Set New Price Targets

NVDA has been the topic of several research reports. Melius Research set a $420.00 price target on shares of NVIDIA in a research report on Thursday, August 27th. Cantor Fitzgerald restated an "overweight" rating and set a $350.00 target price on shares of NVIDIA in a research report on Thursday, October 1st. Jefferies Financial Group reaffirmed a "buy" rating on shares of NVIDIA in a report on Wednesday, August 26th. Yorkville Ives initiated coverage on NVIDIA in a research report on Tuesday, October 6th. They issued an "outperform" rating and a $300.00 price target for the company. Finally, President Capital boosted their price objective on NVIDIA from $295.00 to $330.00 in a research note on Thursday, August 27th. Five investment analysts have rated the stock with a Strong Buy rating, forty-nine have issued a Buy rating and one has issued a Hold rating to the company. Based on data from MarketBeat, NVIDIA currently has a consensus rating of "Buy" and a consensus price target of $321.47.

NVIDIA Price Performance

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 business's fifty day moving average price is $222.15 and its 200-day moving average price is $203.85. The company has a market capitalization of $5.19 trillion, a P/E ratio of 27.23, a P/E/G ratio of 1.62 and a beta of 2.22.

NVIDIA (NASDAQ:NVDA - Get Free Report) last announced 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. The firm had revenue of $96.22 billion for 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 was up 105.9% on a year-over-year basis. During the same period in the prior year, the company earned $1.05 EPS. As a group, sell-side analysts predict that NVIDIA Corporation will post 9.30 earnings per share for the current fiscal year.

NVIDIA Announces Dividend

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

NVIDIA announced that its board has initiated a stock repurchase plan on Monday, September 28th that allows the company to repurchase $150 billion in shares. This buyback authorization allows the computer hardware maker to buy up to 2.8% of its shares through open market purchases. Stock buyback plans are typically an indication that the company's management believes its stock is undervalued.

Insider Buying and Selling at NVIDIA

In related news, CFO Colette Kress sold 34,918 shares of the firm's 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 transaction, the chief financial officer directly owned 765,103 shares in the company, valued at $167,595,812.15. This trade represents a 4.36% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Mark A. Stevens sold 622,239 shares of NVIDIA stock in a transaction that occurred on 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 completion of the transaction, the director directly owned 2,336,531 shares in the company, valued at $541,187,310.22. This trade represents a 21.03% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 1,766,118 shares of company stock worth $399,450,353 over the last three months. Company insiders own 3.94% of the company's stock.

Institutional Investors Weigh In On NVIDIA

Institutional investors have recently added to or reduced their stakes in the company. State Street Corp boosted its stake 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 purchasing an additional 15,897,836 shares during the last quarter. Bank of America Corp DE grew its holdings in NVIDIA by 2.2% during the second 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 during the period. Amundi increased its holdings in NVIDIA by 10.4% in 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 in the last quarter. Deutsche Bank AG raised its holdings 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 during the period. Finally, Dimensional Fund Advisors LP raised 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 valued at $16,479,126,000 after buying an additional 555,221 shares during the last quarter. Hedge funds and other institutional investors own 65.27% of the company's stock.

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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