Last Friday, a Wall Street analyst rarely downgraded Nvidia's (NVDA) stock rating.
New Street Research analyst Pierre Ferragu downgraded the artificial intelligence giant's stock rating to "neutral" from "buy" in a report last Friday, saying the stock appears to be "fully valued."
Nvidia's stock price suddenly plunged at the end of the day. By the close of trading, its stock price had fallen by nearly 2%, and its total market value had evaporated by US$60.3 billion (approximately RMB 440 billion) in a single day.
Ferragu isn't saying he's bearish on the stock, though; he's just not as bullish as he's been lately, or as optimistic as many others on Wall Street.
The analyst set the firm’s one-year and two-year price targets for Nvidia shares at $135 and $143, respectively, implying potential upside of 6% and 12% from current levels.
“Based on what we are hearing from across the value chain, we see limited further upside,” Ferragu said. “We downgraded the stock to Neutral today as it would only rise in a bull case scenario where the outlook materially improves beyond 2025, which we are not yet confident of.”
Ferragu said that while Nvidia still has the strongest artificial intelligence business among its competitors, it is necessary to "take a more cautious view on the stock" after its 157% gain so far this year.
“Nonetheless, the position remains intact and we would buy (Nvidia shares) again, but only in the event of prolonged weakness,” Ferragu said.
Bloomberg data shows that negative comments on Nvidia from Wall Street analysts are rare, with 89% of 72 analysts rating Nvidia's stock as "buy."
Ferragu set a year-end price target of $135 for Nvidia shares, in line with the stock's 12-month average price target of $134.77.
Eric Jackson, founder of hedge fund EMJ Capital, predicts that Nvidia's stock price will double by the end of this year, with a market value of $6 trillion.
The article is forwarded from: Jinshi Data
