Free Trial

Why NVIDIA Is More of a Screaming Buy Than Ever

Computer with the logo of Nvidia Corporation which is a company specialized in the development of graphic processing units.THURSDAY, NOVEMBER 21, 2022. UNITED STATES, CALIFORNIA. - Stock Editorial Photography

Key Points

  • Shares of NVIDIA have been struggling to find momentum in recent weeks.
  • Their Q2 earnings report was nothing short of stellar, but still, the stock has been sold off. 
  • There are reasons to think that’s creating a serious entry opportunity for those of us on the sidelines. 
  • 5 stocks we like better than NVIDIA.

Few investors at the start of the year would have expected NVIDIA Corporation NASDAQ: NVDA to be “trading in bear territory” by the end of the summer. But that’s exactly what Goldman Sachs called it yesterday, as the tech titan continued to struggle for upward momentum after last week’s earnings report. 

Indeed, a 10% drop in NVIDIA shares this past Tuesday caused what’s been called the largest single-day market cap loss in history. The stock is now down close to 20% from its pre-earnings high and 25% from June’s all-time high. 

NVIDIA's Cagey Performance

NVIDIA Today

NVIDIA Co. stock logo
NVDANVDA 90-day performance
NVIDIA
$134.70 +4.02 (+3.08%)
(As of 12/20/2024 05:45 PM ET)
52-Week Range
$47.32
$152.89
Dividend Yield
0.03%
P/E Ratio
53.01
Price Target
$164.15

While it was undoubtedly one of the best-performing stocks in the first half of the year, the bulls look nowhere to be seen right now with NVIDIA shares, and they’re quickly outpacing the broader market with this current decline. For context, the benchmark S&P 500 index has only been down 1% for the past two weeks, compared to NVIDIA’s 20% decline. 

But for all that, there are reasons to be cautiously bullish, especially for investors with the right kind of risk appetite. NVIDIA still holds upwards of 90% of the global AI chip market and is, without a doubt, the hottest stock out there right now. The Fed has made it clear that they intend to start cutting rates soon, and this can only benefit growth stocks like NVIDIA, which bodes well for its continued growth. 

Let’s jump in and take a closer look at the bull’s thesis. 

Bullish Outlook for NVIDIA: Record Revenues and AI Leadership

For starters, the company’s phenomenal fundamental performance, as seen most recently in last week’s Q2 earnings, is unsurprising. Given that they’ve only missed analyst expectations once since 2015, NVIDIA smashed the consensus and delivered a strong, all-around beat. Instead of the $0.64 analysts were expecting for the company’s earnings, they got $0.68 a share, while revenue was also hot and showed year-over-year growth of more than 122%. 

The good news didn’t stop there. Against the consensus that Q3’s revenue would be $31.75 billion, NVIDIA gave fresh guidance for it to land closer to $32.5 billion, while management approved an additional $50 billion in share repurchases. 

By any measure, this was a stellar report, and one most companies would die for. NVIDIA’s outlook and growth prospects remain exceedingly bullish, with CEO Jensen Huang noting that we “achieved record revenues as global data centers are in full throttle to modernize the entire computing stack with accelerated computing and generative AI.”

NVIDIA’s Post-Earnings Sell-Off: An Opportunity for Investors?

However, the stock has done nothing but see a sell-off since the report was released, a trend that is perplexing investors and analysts alike. Given how much it has dominated headlines for the past year, there’s a chance the market suffers a little from AI fatigue, if not NVIDIA fatigue. But if this is the case, then it can only be good for those of us on the sidelines. 

NVIDIA Stock Forecast Today

12-Month Stock Price Forecast:
$164.15
21.87% Upside
Moderate Buy
Based on 43 Analyst Ratings
High Forecast$200.00
Average Forecast$164.15
Low Forecast$85.00
NVIDIA Stock Forecast Details

It’s not very often that you see a stock deliver that kind of performance and then manage to catch an entry as it falls well below its pre-earnings level. It would be one thing if there were concerns that NVIDIA was hopelessly overvalued and that the results were good but not good enough, but with a price-to-earnings ratio of just 50, you’d be hard-pressed to make that call and stand over it.

Instead, there has been an overwhelming flood of analysts reiterating their Buy, Outperform, and Overweight ratings on NVIDIA shares, with the majority boosting their price targets. Take Sanford C. Bernstein, for example, who did just that with a fresh price target of $155. Or Benchmark, which came out with a boosted price target of $170. 

Considering NVIDIA shares closed below $110 on Wednesday night, both are solid reasons for investors to be excited. But they’re not even the highest; that was from Rosenblatt Securities, who, with a $200 price target, are calling for as much as 85% upside from current prices. Now, that’s a reason to be excited if ever there was one.

→ I was wrong. Dead wrong. (From Porter & Company) (Ad)

Should you invest $1,000 in NVIDIA right now?

Before you consider NVIDIA, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and NVIDIA wasn't on the list.

While NVIDIA currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

(Almost)  Everything You Need To Know About The EV Market Cover

Click the link below and we'll send you MarketBeat's guide to investing in electric vehicle technologies (EV) and which EV stocks show the most promise.

Get This Free Report
Sam Quirke
About The Author

Sam Quirke

Contributing Author

Technical Analysis

Like this article? Share it with a colleague.

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
NVIDIA (NVDA)
4.9324 of 5 stars
$134.70+3.1%0.03%53.01Moderate Buy$164.15
Compare These Stocks  Add These Stocks to My Watchlist 


Featured Articles and Offers

Recent Videos

From Landfills to Profits: Opal Fuels CEO Shares How the Company Turns Trash into Cash
The Real Reason Tesla Stock Is Soaring – and Why Tech Expert Says It Won’t Stop
Best ETFs for 2025: Growth, Stability, and AI-Driven Investing

Stock Lists

All Stock Lists

Investing Tools

Calendars and Tools

Search Headlines