After the stock of Nvidia (NASDAQ: NVDA) had more than tripled over the course of the previous year, it appeared that the company would not be able to maintain its rapid growth. Since the beginning of the past few weeks, the stock has finally started to give back a little portion of those gains.
Barron's highlighted an analyst study that threw cold water on many investors' growth projections for Nvidia's artificial intelligence (AI) computer chip sales, which led to the continuation of this downward trend today. The price of the stock fell by approximately 5% and continued to fall by 2.8% as of 1:30 p.m. Eastern Time.
A conclusion to the supremacy of artificial intelligence (AI) Nvidia has been the industry leader in the provision of hardware and even software to meet the high-powered computing requirements that have arisen as a result of the proliferation of artificial intelligence applications.
Many megacap technology businesses, such as Microsoft, Meta Platforms, and even Tesla, have been at the forefront of a lengthy queue of purchasers.
However, Gil Luria, an analyst at D.A. Davidson, believes that this is precisely the reason why Nvidia shares will continue to decline. Those large technological corporations will soon be moving their investment in order to increase the manufacturing of hardware related to artificial intelligence, according to a report that was published not too long ago by Luria. Luria is of the opinion that this will consequently result in a "significant cyclical downturn by 2026" for Nvidia.
Due to this line of reasoning, D.A. Davidson anticipates that the price of Nvidia shares will fall to $620 per share. This would be a decrease of almost thirty percent from the price at which the market closed on Monday.
However, investors should also consider the broader environment in which that prognosis is made. There is more to Nvidia than just artificial intelligence chips. Moreover, it has the potential to increase its revenue in the years to come from its other business sectors, which include technologies for autonomous driving.
The rise in Nvidia's stock price has unquestionably been long and rapid. However, despite the fact that Luria has predicted a price objective for the shares, she has maintained a "hold" recommendation on them. Taking that course of action is arguably the most logical thing to do for long-term investors. A further decrease in the price of the shares can even present an excellent opportunity to acquire further shares.
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