Nvidia: Don’t Be Blinded By Foolish Optimism (Rating Downgrade)

Summary:

  • Nvidia’s beat-and-raise fiscal third quarter results failed to deliver the decisive push for NVDA to surge above the $500 zone.
  • Wall Street analysts have upgraded their rating on Nvidia to Strong Buy, with a higher price target of $653. Analysts have gone gaga over the company’s prospects.
  • However, the market appears skeptical of Nvidia’s ability to meet analysts’ high earnings projections. As a result, some investors question whether the “market is wrong.”
  • I argue why over-optimism, no matter how excellent the company’s prospects are, could lead to a dangerous setup, particularly when the market is telling you otherwise.
  • Don’t be blinded by what analysts and management are telling you. Consider why the market has refused to let NVDA rip higher despite its third quarter beat-and-raise.

Chipmaker NVIDIA"s Valuation Passes 1 Trillion In Market Cap

Justin Sullivan

NVIDIA Corporation (NASDAQ:NVDA) investors likely expected that its beat-and-raise fiscal third quarter or FQ3 earnings release could have bolstered buying sentiment for NVDA to finally break decisively above the $500 zone. However, astute sellers were waiting for these late


Analyst’s Disclosure: I/we have a beneficial long position in the shares of NVDA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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