NVIDIA (NASDAQ:NVDA) Stock Falls 5.5% Following Analyst Downgrade

NVIDIA Corporation (NASDAQ:NVDA) dropped 5.5% during trading on Tuesday after Citigroup lowered their price target on the stock from $315.00 to $285.00. Citigroup currently has a buy rating on the stock. NVIDIA traded as low as $165.89 and last traded at $168.9310. 421,565,527 shares changed hands during mid-day trading, an increase of 178% from the average session volume of 151,840,688 shares. The stock had previously closed at $178.67.

Several other equities research analysts have also recently weighed in on NVDA. Needham & Company LLC reiterated a “buy” rating and set a $300.00 price target on shares of NVIDIA in a research report on Wednesday, October 21st. Phillip Securities boosted their price objective on shares of NVIDIA from $285.00 to $300.00 and gave the company a “buy” rating in a research note on Monday, August 31st. Rosenblatt Securities reaffirmed a “buy” rating and set a $390.00 price objective on shares of NVIDIA in a research note on Tuesday, September 29th. BNP Paribas Exane reaffirmed an “outperform” rating and set a $345.00 target price on shares of NVIDIA in a report on Monday, October 5th. Finally, Mizuho set a $250.00 target price on shares of NVIDIA in a research note on Monday. Five analysts have rated the stock with a Strong Buy rating, forty-eight have issued a Buy rating and two have given a Hold rating to the stock. According to data from MarketBeat, the stock currently has an average rating of “Buy” and an average target price of $318.75.

Insider Buying and Selling

In other NVIDIA news, EVP Timothy S. Teter sold 30,460 shares of the business’s stock in a transaction that occurred on Monday, September 21st. The shares were sold at an average price of $222.80, for a total value of $6,786,488.00. Following the completion of the transaction, the executive vice president owned 2,687,660 shares of the company’s stock, valued at $598,810,648. The trade was a 1.12% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Colette Kress sold 34,918 shares of the stock in a transaction on Thursday, September 17th. The stock was sold at an average price of $219.05, for a total transaction of $7,648,787.90. Following the completion of the transaction, the chief financial officer directly owned 765,103 shares in the company, valued at $167,595,812.15. The trade was a 4.36% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last three months, insiders have sold 1,766,118 shares of company stock worth $399,450,353. Insiders own 3.94% of the company’s stock.

Key Stories Impacting NVIDIA

Here are the key news stories impacting NVIDIA this week:

• Positive Sentiment: Some analysts remain bullish: Citi cut its price target to $285 but kept a Buy rating, while Wells Fargo lowered its target to $300 and maintained Overweight. Cathie Wood’s funds were also reported to have added shares during the sell-off. Read More.
• Positive Sentiment: A partnership with South Korea’s Rebellions and SK Telecom will use NVIDIA’s NVLink Fusion and infrastructure for AI systems, supporting the company’s push to remain central to AI deployments. Read More.
• Neutral Sentiment: NVIDIA’s independent directors have retained outside counsel to investigate whether CEO Jensen Huang was targeted in a foreign intelligence effort. The board has said it has no reason to believe company secrets or national security were compromised; the investigation’s findings remain unknown. Read More.
• Negative Sentiment: Reports allege that Huang’s ties to Alice Huang, a businesswoman suspected by U.S. officials of working with Chinese intelligence, helped facilitate $7.5 billion in NVIDIA chip shipments to China. The claim has not been independently verified in the cited reporting, but it raises the prospect of export-control scrutiny and renewed restrictions on China sales. Read More.
• Negative Sentiment: Shareholder securities lawsuits have been filed, alleging investors were not adequately informed about risks related to the controversy. Multiple law firms are publicizing the cases, adding reputational and legal uncertainty. Read More.
• Negative Sentiment: Investors are also weighing key-person risk: Huang is closely identified with NVIDIA, and reports say the company lacks a clear public succession plan. Broader AI-market weakness, high Treasury yields and concerns about memory costs and margins add pressure. Read More.

Institutional Inflows and Outflows

A number of institutional investors have recently added to or reduced their stakes in NVDA. Boyd Wealth Management LLC raised its holdings in shares of NVIDIA by 273.4% in the 2nd quarter. Boyd Wealth Management LLC now owns 9,145 shares of the computer hardware maker’s stock valued at $1,830,000 after acquiring an additional 6,696 shares in the last quarter. Ally Financial Inc. grew its holdings in shares of NVIDIA by 10.3% during the second quarter. Ally Financial Inc. now owns 172,000 shares of the computer hardware maker’s stock worth $34,415,000 after purchasing an additional 16,000 shares in the last quarter. Altshuler Shaham Ltd grew its holdings in shares of NVIDIA by 6,451.9% during the first quarter. Altshuler Shaham Ltd now owns 637,236 shares of the computer hardware maker’s stock worth $111,134,000 after purchasing an additional 627,510 shares in the last quarter. Vanguard Capital Wealth Advisors increased its position in shares of NVIDIA by 5.6% in the second quarter. Vanguard Capital Wealth Advisors now owns 52,163 shares of the computer hardware maker’s stock worth $10,437,000 after purchasing an additional 2,758 shares during the last quarter. Finally, Baker Tilly Wealth Management LLC raised its stake in NVIDIA by 7.4% in the second quarter. Baker Tilly Wealth Management LLC now owns 71,898 shares of the computer hardware maker’s stock valued at $14,386,000 after purchasing an additional 4,958 shares in the last quarter. Institutional investors own 65.27% of the company’s stock.

NVIDIA Price Performance

The firm has a market capitalization of $4.07 trillion, a PE ratio of 21.36, a P/E/G ratio of 1.54 and a beta of 2.21. The company has a debt-to-equity ratio of 0.14, a current ratio of 4.59 and a quick ratio of 3.85. The business’s 50 day moving average is $219.03 and its two-hundred day moving average is $204.50.

NVIDIA (NASDAQ:NVDA) last posted its quarterly earnings data on Wednesday, August 26th. The computer hardware maker reported $2.22 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $2.09 by $0.13. NVIDIA had a net margin of 63.66% and a return on equity of 96.04%. The company had revenue of $96.22 billion during the quarter, compared to the consensus estimate of $92.27 billion. During the same period in the previous year, the firm posted $1.05 EPS. The firm’s revenue was up 105.9% compared to the same quarter last year. As a group, research analysts anticipate that NVIDIA Corporation will post 9.30 EPS for the current year.

NVIDIA Dividend Announcement

The company also recently disclosed a quarterly dividend, which was paid on Thursday, October 1st. Stockholders of record on Thursday, September 10th were given a dividend of $0.25 per share. The ex-dividend date was Thursday, September 10th. This represents a $1.00 annualized dividend and a dividend yield of 0.6%. NVIDIA’s dividend payout ratio is 12.64%.

NVIDIA declared that its Board of Directors has authorized a share buyback plan on Monday, September 28th that permits the company to buy back $150 billion in shares. This buyback authorization permits the computer hardware maker to buy up to 2.8% of its stock through open market purchases. Share buyback plans are often an indication that the company’s board of directors believes its stock is undervalued.

About NVIDIA

NVIDIA Corporation develops graphics processing units (GPUs), accelerated computing platforms and related software. Founded in 1993, the company first became widely known for GPUs used in PC gaming and professional graphics. Its technology now also supports artificial intelligence, scientific computing and other data-intensive applications. NVIDIA’s offerings include GeForce products for gaming, data-center GPUs and systems for AI workloads, and networking products that connect computing infrastructure.