NVIDIA (NASDAQ:NVDA) Stock Price Down 4.6% - Time to Sell?

Key Points

• NVIDIA shares fell 4.6% to about $217.55 in heavy trading, despite fiscal Q2 results that exceeded expectations with $96.2 billion in revenue and $2.22 in adjusted EPS.
• Management projected approximately $108 billion in fiscal Q3 revenue, while analysts raised price targets; the stock carries a “Moderate Buy” consensus rating and an average target of $322.61.
• Key risks include declining gross margins, rising expenses, the absence of expected China data-center revenue, potential customer-financing concerns, higher-for-longer interest rates and recent insider selling.

NVIDIA Corporation (NASDAQ:NVDA - Get Free Report) fell 4.6% during mid-day trading on Friday . The company traded as low as $216.81 and last traded at $217.55. Approximately 193,499,131 shares traded hands during trading, an increase of 21% from the average daily volume of 159,716,031 shares. The stock had previously closed at $227.98.

NVIDIA News Summary

Here are the key news stories impacting NVIDIA this week:

• Positive Sentiment: NVIDIA’s fiscal Q2 results exceeded expectations, with revenue of $96.2 billion, up 106% year over year, and Data Center revenue of $89 billion, up 117%. Adjusted EPS was $2.22 versus the $2.09 consensus. NVIDIA fiscal second-quarter results
• Positive Sentiment: Management forecast approximately $108 billion in fiscal Q3 revenue and about 70% revenue growth for fiscal 2028, well above Wall Street’s prior expectations near 45%. The outlook suggests AI infrastructure demand remains supply-constrained rather than demand-constrained. NVIDIA longer AI spending runway
• Positive Sentiment: Analysts raised price targets following the results, including Wedbush to $345, Truist to $346, and JPMorgan to $320, reinforcing the bullish view on Blackwell, the Vera Rubin ramp and long-term AI spending.
• Positive Sentiment: NVIDIA reportedly agreed to acquire open-source AI platform Hugging Face for approximately $12.9 billion. The deal could expand NVIDIA beyond chips into models, developer tools and cloud capacity, potentially strengthening demand for its hardware, although the transaction has not been fully confirmed. NVIDIA Hugging Face acquisition report
• Neutral Sentiment: NVIDIA expanded its AWS relationship to deliver an additional 2 million GPUs, while also pursuing large financing and infrastructure partnerships. These initiatives could broaden future revenue, but increase exposure to customer financing and project execution.
• Negative Sentiment: Fiscal Q3 gross-margin guidance of 74% is below the 75% achieved in Q2, reflecting higher memory, packaging and infrastructure costs. Operating expenses are also rising rapidly.
• Negative Sentiment: The outlook assumes no Data Center compute revenue from China, highlighting export-control and market-access risks. NVIDIA is simultaneously optimizing products for Chinese open models, which could invite additional regulatory scrutiny. NVIDIA Chinese AI models report
• Negative Sentiment: Reports that NVIDIA paused some revenue-sharing deals with AI cloud companies have revived concerns about circular financing and customer credit risk. Investors are also locking in gains after the sharp earnings-driven advance.
• Negative Sentiment: A hawkish Federal Reserve message at Jackson Hole increased concerns that interest rates may remain higher for longer, pressuring richly valued, high-beta technology stocks.

Analysts Set New Price Targets

A number of brokerages recently commented on NVDA. Oppenheimer set a $315.00 price target on shares of NVIDIA and gave the company an "outperform" rating in a research note on Thursday. Weiss Ratings restated a "buy (b)" rating on shares of NVIDIA in a research report on Wednesday, July 8th. Argus boosted their price objective on NVIDIA from $220.00 to $270.00 and gave the stock a "buy" rating in a report on Thursday, May 21st. HSBC reaffirmed a "buy" rating and issued a $325.00 target price (up from $295.00) on shares of NVIDIA in a research report on Tuesday, May 19th. Finally, Cantor Fitzgerald reissued an "overweight" rating and set a $350.00 price target on shares of NVIDIA in a report on Monday. Two research analysts have rated the stock with a Strong Buy rating, forty-eight have given a Buy rating and four have given a Hold rating to the company. According to MarketBeat, the company currently has a consensus rating of "Moderate Buy" and a consensus target price of $322.61.

NVIDIA Price Performance

The company has a quick ratio of 2.85, a current ratio of 3.44 and a debt-to-equity ratio of 0.04. The company's fifty day moving average price is $207.95 and its 200 day moving average price is $200.66. The company has a market capitalization of $5.26 trillion, a P/E ratio of 27.50, a PEG ratio of 0.41 and a beta of 2.23.

NVIDIA (NASDAQ:NVDA - Get Free Report) last issued its quarterly earnings results on Wednesday, August 26th. The computer hardware maker reported $2.22 earnings per share (EPS) for the quarter, beating the consensus estimate of $2.09 by $0.13. The business had revenue of $96.22 billion during the quarter, compared to analysts' expectations of $92.27 billion. NVIDIA had a return on equity of 107.00% and a net margin of 63.66%.The firm's revenue for the quarter was up 105.9% compared to the same quarter last year. During the same period in the previous year, the company posted $1.05 earnings per share. As a group, sell-side analysts forecast that NVIDIA Corporation will post 8.8 EPS for the current year.

NVIDIA Announces Dividend

The business also recently declared a quarterly dividend, which will be paid on Thursday, October 1st. Investors of record on Thursday, September 10th will be paid a $0.25 dividend. This represents a $1.00 dividend on an annualized basis and a yield of 0.5%. The ex-dividend date of this dividend is Thursday, September 10th. NVIDIA's payout ratio is 15.31%.

NVIDIA declared that its board has approved a share buyback plan on Wednesday, May 20th that authorizes the company to repurchase $80.00 billion in shares. This repurchase authorization authorizes the computer hardware maker to buy up to 1.5% of its shares through open market purchases. Shares repurchase plans are typically an indication that the company's leadership believes its shares are undervalued.

Insider Activity

In other news, Director Stephen C. Neal sold 15,500 shares of the business's stock in a transaction that occurred on Wednesday, June 3rd. The shares were sold at an average price of $215.73, for a total value of $3,343,815.00. Following the completion of the transaction, the director directly owned 116,135 shares in the company, valued at approximately $25,053,803.55. The trade was a 11.77% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, Director Mark A. Stevens sold 885,000 shares of the company's stock in a transaction that occurred on Thursday, June 18th. The stock was sold at an average price of $210.17, for a total transaction of $186,000,450.00. Following the sale, the director directly owned 5,207,271 shares of the company's stock, valued at approximately $1,094,412,146.07. This trade represents a 14.53% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold 1,900,500 shares of company stock valued at $410,449,265 in the last ninety days. 3.94% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

Several institutional investors have recently added to or reduced their stakes in the company. Montgomery Financial Services LLC acquired a new position in NVIDIA during the second quarter worth about $28,000. Lifetime Wealth Management P.C. bought a new stake in shares of NVIDIA during the 4th quarter valued at approximately $26,000. Longview Financial Advisors Inc. acquired a new position in NVIDIA during the 1st quarter worth approximately $27,000. Longfellow Investment Management Co. LLC increased its position in NVIDIA by 47.9% during the 2nd quarter. Longfellow Investment Management Co. LLC now owns 207 shares of the computer hardware maker's stock worth $33,000 after purchasing an additional 67 shares in the last quarter. Finally, Phillip James Consulting Co. bought a new position in NVIDIA in the 1st quarter valued at approximately $40,000. 65.27% of the stock is currently owned by institutional investors and hedge funds.

NVIDIA Company Profile

NVIDIA Corporation, founded in 1993 and headquartered in Santa Clara, California, is a global technology company that designs and develops graphics processing units (GPUs) and system-on-chip (SoC) technologies. Co-founded by Jensen Huang, who serves as president and chief executive officer, along with Chris Malachowsky and Curtis Priem, NVIDIA has grown from a graphics-focused chipmaker into a broad provider of accelerated computing hardware and software for multiple industries.

The company's product portfolio spans discrete GPUs for gaming and professional visualization (marketed under the GeForce and NVIDIA RTX lines), high-performance data center accelerators used for AI training and inference (including widely adopted platforms such as the A100 and H100 series), and Tegra SoCs for automotive and edge applications.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

Continue following MarketBeat

Add MarketBeat as your preferred source on Google to see our latest stories in your feed.

Add As Preferred Source