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What happened
After four consecutive trading days of selling without mitigation, shares of the charting and crypto-mining semiconductor maker Nvidia (NASDAQ: NVDA) reversed course today – and rebounded nearly 5%!
Of course, those morning gains turned out to be fleeting, but at 2:15 p.m. EDT, Nvidia stock still maintains a respectable 3.3% gain. (And you must be wondering if it could be even higher if the stock market hadn’t suddenly gone into a hand basket today.)
Image source: Getty Images.
So what
Investors can send their thanks directly to Morningstar, which was quoted today commenting that “after taking a fresh look at our dissertation on Nvidia, we are increasing our rating from wide to narrow, thanks to related intangibles. to the design of graphics processing units (GPUs). ”
Now what
In the wake of equally positive ratings in recent weeks from investment banks such as KeyBanc, BMO Capital Markets and Mizuho, which have proposed price targets ranging from $ 900 to $ 1,000 for Nvidia stock (which costs only around $ 750 today), it seems there is a consensus forming on Wall Street that the time to sell is over and the time to buy has arrived – and maybe that they are right.
Nvidia’s price strength today in the face of a general stock market meltdown certainly suggests that investors are tired of selling Nvidia shares. But all that being said, when I look at Nvidia’s valuation today – 85 times rolling earnings and even 82 times free cash flow – I can’t help but think that the stock remains high in price.
And despite Wall Street optimists, I’m worried that Nvidia stock may have to go down further.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.
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