English
French
German
Italian
Russian
Spanish
Analyst sees 15% downside risk for Nvidia stock as AI hits ‘trough of disillusionment’
Analyst sees 15% downside risk for Nvidia stock as AI hits ‘trough of disillusionment’ By Investing.com
Breaking News
‘;
AuthorSenad KaraahmetovicStock Markets
Published Jan 03, 2024 05:48AM ET
© Reuters. Analyst sees 15% downside risk for Nvidia stock as AI hits ‘trough of disillusionment’
DA Davidson analysts assert that NVIDIA (NVDA) plays a crucial role as a leader in accelerated computing, projecting an impressive 20% compound annual growth rate (CAGR) from 2022 levels across cycles.
Despite recognizing NVDA’s dominance in various categories, analysts express skepticism about the likelihood of consensus expectations for the out-years materializing.
They anticipate a reversion to the trend line within the next 2-6 quarters, citing vulnerability for NVDA as the hype around artificial intelligence (AI) approaches the “trough of disillusionment.”
“While we continue to believe that generative AI is the most important transformative technology since the Internet, we do not expect the same level of investment we saw in 2023 continuing beyond 2024,” analysts said in a note.
As a result, analysts initiated new research coverage on Nvidia (NASDAQ:NVDA) stock at Neutral with a price target of $410 per share, which implies a downside risk of 15% based on Tuesday’s closing price.
“Our $410 price target is based on a 35x multiple on the $7.29 of CY24 EPS for the core company and $155 for the sandbox revenue still coming to NVDA over the next 4-6 quarters. We believe the value of this sandbox could drop considerably once NVDA growth rolls over,” analysts explained.
Nvidia stock closed 2.7% lower on the first trading day in 2024 and is down a further 1.1% in pre-market Wednesday.
Analyst sees 15% downside risk for Nvidia stock as AI hits ‘trough of disillusionment’
Terms And Conditions
Privacy Policy
Risk Warning
Do not sell my personal information
© 2007-2024 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
