The incredible rise of NVIDIA Corporation (NASDAQ: NVDA) has created more collective wealth in recent years than almost any other stock or asset. After all, it want from being worth a few hundred billion to being worth $3.4 trillion at the recent peak. Nothing lasts forever, or at least not in a straight line. After NVIDIA peaked at $140.76 after completing its 10-for-1 stock split, the shares have dipped down to about $122 on last look. That’s a $400 billion erosion in market capitalization after a 13% sell-off, and a week earlier the sell-off and pullback had been down to about $118 before it recovered.
Just don’t bother telling Wall Street’s analysts about the pullback in NVIDIA. Analysts have continued to hike their price targets to the point that NVIDIA is now back under the consensus analyst target price rather than trading above it.
A rational pullback should have been expected. It was just a question of when because it’s inflows and relative strength readings had reached incredible zenith readings that are very rarely ever seen in the investing world. Many comparisons were even made to the explosive gains and valuations of the Dot-Com Bubble that started forming in 1998 and 1999 before the bubble burst in March of 2000. Many of those leadership stock of the Dot-Com Bubble actually never returned to their old highs.
So what does all this mean for NVIDIA? Wall Street seems to not care. In fact, some analyst calls are now projecting that NVIDIA will hit a valuation of $4 trillion. Or even $5 trillion. And that’s not just at some point in the distant future. The typical analyst price target issued with each report is typically considered to be a 12-month price target.
Do not forget that analyst price targets do not always materialize. Some analysts keep raising target prices even after the stock has peaked. Whether or not that pertains to NVIDIA remains to be seen. And whether you choose to follow any analyst call is entirely up to you. Do not forget that analyst calls should never be the only reason to buy a stock. And do not forget that these big targets ahead throw some serious dirt on the so-called Efficient Market Hypothesis.
Oggonomics is showing the myriad of price hikes from Wall Street analysts that have been issued since its stock split took effect. Most of these calls are maintained at the prior positive ratings.
- Morgan Stanley (Overweight) target raised to $144 from $116 (July 1)
- Truist (Buy) target raised to $140 from $128.80 (June 27)
- Cantor Fitzgerald (Overweight) target raised to $175 from $140 (June 26)
- Citigroup (Buy) target raised to $150 from $126 (June 26)
- (Jefferies (Buy) target raised to $150 from $135 (June 24)
- Melius Research (Buy) target raised to $160 from $125 (June 21)
- BofA Securities (Buy and Top Pick) reiterated target of $150 (June 19)
- Tigress Financial (Buy) target raised to $170 from $98.50 (June 18)
- Wells Fargo (Overweight) target raised to $155 from $125 (June 18)
- Rosenblatt (Buy) target raised to $200 from $140 (June 18)
Technical traders who only use charts and momentum to judge a stock might have more concern around the 20-day, 50-day and 200-day moving averages. At this time, these are the moving average numbers to watch but remember these numbers change daily:
- 20-day $121.88
- 50-day $106.33
- 200-day $72.12
As you may have noticed, there is not a single analyst downgrade from any of the most widely followed brokerage firms covering NVIDIA. One issue is that most feel the real wave of A.I. is still only in the infancy state as most companies are only working toward implementing A.I. in some portions of their business operations. Another issue for seeing no downgrades is that any analyst who would dare formally downgrade this stock would 1) fear the biggest gains in recent history and 2) worry about being the only person complaining about winning a lottery ticket.
Again, analyst calls should never be the sole reason for you to buy or sell a stock. It’s true for the mighty NVIDIA. It’s true for any stock out there. And whatever the decision is to buy, sell or hold is also solely up to each investor.
