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Nvidia's Shares Experienced a Decline Early Tuesday Morning

After achieving its remarkable success, the stock is temporarily pausing its upward trajectory.

Nvidia's Shares Experienced a Decrease During Early Tuesday Morning Trade.
Nvidia's Shares Experienced a Decrease During Early Tuesday Morning Trade.

Nvidia's Shares Experienced a Decline Early Tuesday Morning

Nvidia's (NVDA 2.63%) shares saw a slip on Tuesday, with a maximum dip of 6%, but even then, they were still down 5.6% as of 3:13 p.m. ET. This downturn seemed to be a consequence of overall market instability, coupled with investors trying to process the numerous announcements made by Nvidia at the start of CES in Las Vegas.

Nvidia's CEO, Jensen Huang, kicked off CES 2023 with an impressive list of product introductions. These included Project DIGITS, a compact AI supercomputer equipped with the Grace Blackwell Superchip. The gaming sector also saw the release of next-generation GeForce RTX 50 series GPUs and laptops, powered by AI and the Blackwell architecture. The Cosmos platform was unveiled as well, featuring AI models designed for robots, autonomous vehicles, and computer vision. Additionally, Nvidia introduced AI Blueprints for Agentic AI, a tool to help developers automate a variety of business functions.

In early November of last year, Nvidia stock hit an unprecedented high, only to drop an alarming 13% without any specific reasons. Following this brief correction, the stock managed a remarkable recovery, reaching a new record close on Monday.

Analyst Dan Ives from Wedbush described Huang's CES speech as more reminiscent of a rock concert than that of a usual tech CEO. Despite Nvidia's staggering 900% growth over the past two years, Ives is optimistic that Nvidia's market cap of approximately $3.5 trillion will break the $4 trillion barrier and potentially scale up to $5 trillion within 12 to 18 months, suggesting a potential upside of 44%.

Remarkably, Nvidia stock is considered reasonably priced, trading around 32 times its anticipated earnings for 2026. Making the stock even more appealing as an investment option.

According to predictions from 40 analysts, the average target price for Nvidia stock is $169.53, with a minimum estimate of $87 and a maximum of $220. Consequently, the consensus rating for the stock is "Strong Buy," indicating its high potential for significant market outperformance.

As per 24/7 Wall Street's forecast for 2025, shares of Nvidia may be trading at $137.50 based on a projected EPS of $2.75 and a P/E ratio of 50. In the best-case scenario, the stock may hit $192.50 per share, while in the worst-case scenario, it may drop to $82.50 per share. Analysts also estimate a 52% increase in Nvidia's revenue for its new fiscal year, potentially leading to increased sales for the company.

Moreover, DeepSeek AI predicts a $248 price target for Nvidia stock by the end of 2025, based on an EPS estimate of $4.51 and a 55x multiple.

Nvidia continues to command a prominent position in the AI GPU market, with robust demand from major tech companies and emerging industries. In addition, its supply chain is expected to experience improvements due to TSMC increasing its advanced packaging capacity by 85% to cater to the booming AI chip demand. Nvidia is anticipated to maintain control of 63% of this increased capacity.

Though there are ongoing challenges and uncertainties, analysts generally remain optimistic about Nvidia's future prospects due to its dominant position in the AI chip market and the strong revenue growth expectations.

  1. Investors might be considering the potential earnings from Nvidia, given the company's announcement of AI Blueprints and other products during CEO Jensen Huang's kickoff at CES 2023.
  2. Despite Nvidia's shares experiencing a dip of 6% on Tuesday, analysts like Dan Ives from Wedbush remain optimistic, predicting a potential market cap of $5 trillion within 12 to 18 months.
  3. Analyst predictions for Nvidia stock's average target price vary widely, with 40 analysts suggesting an average of $169.53, while DeepSeek AI predicts a higher price target of $248 by the end of 2025.
  4. Supercomputer manufacturer Nvidia, led by Huang, continues to dominate the AI GPU market, with robust demand from major tech companies and emerging industries, potentially leading to increased sales and a 52% revenue increase for the company's new fiscal year.

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