‘Brace for a Pullback,’ Says Top Investor About Nvidia Stock

Nvidia (NASDAQ:NVDA) stock is one of those that everyone wishes they had bought back in the day. The dominant AI chipmaker has soared to incredible heights over the past two years, delivering gains of over 900% since January 2023.

The company’s latest generation of GPUs continues to drive demand from hyperscalers and enterprise customers alike. But even a market leader isn’t immune to gravity. While revenue still grew an impressive 69% year-over-year in the latest quarter, that figure marks a slowdown from the triple-digit growth rates seen in previous periods.

Adding to the challenges, Nvidia has faced a trifecta of external pressures in 2024 – from tariff risks and export controls to fears over capex normalization. These headwinds have taken a toll, briefly knocking the stock off its perch earlier this year. Still, resilience is part of Nvidia’s DNA. Since bottoming out in April, the stock has been clawing its way back and is now up 10% for the year.

So where does it go from here? That’s the question investors are asking as they weigh the next chapter in Nvidia’s story. One top investor, known by the pseudonym Juxtaposed Ideas, sees potential turbulence ahead – but also a possible opportunity for those bold enough to lean in when others hesitate.

“We believe that another dip may be coming, presenting a great dollar cost averaging opportunity,” predicts the 5-star investor, who is among the top 3% of TipRanks’ stock pros.

That cautious short-term outlook, however, does not dampen Juxtaposed’s conviction in Nvidia’s long-term trajectory. The investor remains firmly bullish, confident that demand for the company’s AI accelerators will remain strong thanks to their general-purpose capabilities – a key advantage over more limited, custom-built alternatives.

Moreover, the investor points to Nvidia’s powerful software advantage. Its CUDA platform, which underpins over 90% of the AI ecosystem, acts as a “trump card” that helps shield the company from rivals like AMD and Intel, who have so far struggled to gain meaningful traction in this space.

Still, Juxtaposed tempers this optimism with a dose of realism, cautioning that near-term risks – particularly geopolitical volatility and the potential for an escalating trade war – could temporarily stall Nvidia’s momentum.

“We believe that NVDA’s buying momentum has seemingly peaked at current levels, with the stock likely to stagnate at current levels barring any positive catalysts,” the investor summed up. (To watch Juxtaposed Ideas’ track record, click here)

Wall Street, meanwhile, is far from cautious. With 35 Buys, 4 Holds, and only 1 Sell, analysts overwhelmingly back Nvidia with a Strong Buy consensus rating. Their average 12-month price target of $173.19 points to a potential upside of 17%. (See NVDA stock forecast)

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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.