The past few weeks have been quite eventful for Nvidia ( NVDA -0.95% ) The stock of the top artificial intelligence (AI) chip company has fluctuated by 5% in nearly every trading day as investors find it challenging to assess the worth of the leading data center GPU manufacturer.
Nvidia’s stock has experienced a significant increase in value since the beginning of 2023 due to the demand for its hardware in driving the growth of generative AI technology. This has raised concerns about the overall economic stability, the impact of AI on various sectors, and the pace at which Nvidia can expand its operations.
As a result, the stock price has decreased by 23% since then. The Nasdaq Composite index Reached its highest point a month ago. Nevertheless, one analyst views the decrease in price as a chance to purchase.
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New Street Research recommends purchasing Nvidia.
Recently, New Street Research increased its evaluation of Nvidia from neutral due to the recent decline in the stock price. The research company highlighted that the stock had dropped by 26% since its highest point in June, performing worse than other companies in the data center AI sector.
The decline in stock price is viewed as a chance to purchase, and an AI stock has been given a price target of $120, indicating a potential increase of 15%.
Should I invest in Nvidia stocks?
The drop in Nvidia’s stock price coincided with the AI market surge reaching unsustainable levels, however, some believe that the stock is undervalued. Concerns about a looming economic downturn have subsided temporarily. Despite a possible setback with the Blackwell platform launch, Nvidia continues to demonstrate robust growth.
The most recent information from Taiwan Semiconductor Corporation can be rephrased as “TSC.” The largest chip manufacturer in the world reported a 45% increase in revenue compared to the same period last year, and a 24% increase from the previous month. This indicates a strong performance in the semiconductor industry and for AI chips during the final month of Nvidia’s second quarter.
Nvidia is expected to announce its second-quarter financial results at the end of the month and is likely to show impressive growth once again. Following a recent decrease in stock price, it now appears to be more attractively priced. Price-to-earnings ratio calculated based on future earnings is known as the forward price-to-earnings ratio. of 40.
If the overall feeling in the market becomes more positive and Nvidia’s financial results for the second quarter show growth, the stock price may increase substantially by the end of the month. In the extended period, the stock is expected to continue performing well as long as it maintains its position as a leader in artificial intelligence.
