Nvidia Chart Watchers Brace for More Pain With Dip Buyers at Bay
Wednesday, Mar 5, 2025 5:19 am ET
1min read Nvidia (NVDA) stock has been on a rollercoaster ride in recent weeks, with investors grappling with the question of whether to buy the dip or hold off. The company's stock price has been volatile, with a decline of more than 25% below its all-time high, and analysts are divided on whether the worst is over or if more pain is in store.
On one hand, Nvidia's fundamentals remain strong, with the company reporting record revenue and earnings in its most recent quarter. The company's data center business, which accounts for 91% of its total sales, has seen remarkable growth, with revenue increasing about tenfold over the past two years. Nvidia's Blackwell AI chips have also been in high demand, with the company reporting $11 billion in revenue during the fourth quarter, representing the fastest product ramp in its history.
On the other hand, investors are concerned about the potential impact of efficient AI models like DeepSeek's R1, which could limit the need for additional nvidia chips. Additionally, the threat of custom chips developed by technology companies such as Amazon, Microsoft, and Google has raised questions about Nvidia's long-term dominance in the AI market.
Analysts are divided on their outlook for Nvidia's stock. While some, like Gil Luria of DA Davidson, maintain a "Hold" rating on the stock, others, such as Matthew Prisco of Cantor Fitzgerald, have a "Buy" rating and a price target of $200. Cody Acree of Benchmark, another bullish analyst, has a "Strong Buy" rating and a price target of $190.
Investors should be cautious when considering Nvidia's stock, as the company faces both opportunities and challenges in the rapidly evolving AI market. While Nvidia's strong fundamentals and dominant position in AI and data center markets provide a solid foundation, the company must navigate potential threats from custom chips and efficient AI models. As always, it is essential to conduct thorough research and consider multiple perspectives before making investment decisions.
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