Nvidia (NASDAQ:NVDA) continues to deliver exceptional results, but the market’s response speaks more to rising caution around the AI sector than any weakness in the company itself. Even with another record quarter and CEO Jensen Huang noting that “Blackwell sales are off the charts, and cloud GPUs are sold out,” the stock has still slipped 4% since earnings.
TipRanks Cyber Monday Sale
- Claim 60% off TipRanks Premium for data-backed insights and research tools you need to invest with confidence.
- Subscribe to TipRanks' Smart Investor Picks and see our data in action through our high-performing model portfolio - now also 60% off
Top investor Keithen Drury sees that disconnect as a sign that broader sentiment may be starting to outweigh fundamentals.
“Next year could be more challenging, as many investors are starting to fear that AI stocks are in a bubble,” notes the 5-star investor, who ranks among the top 3% of stock pros on TipRanks.
Drury can’t hide his surprise at the company’s dipping share price, which has fallen 14% since reaching a peak in October. It’s all the more striking considering the incredible quarter the company just reported.
The investor notes that the Q3 numbers demonstrate that Nvidia remains “miles ahead” of its peers, and its data center revenues of $51.2 billion truly dominate AMD’s $4.3 billion in data center sales and Broadcom’s $5.2 billion in AI semiconductor revenue. Drury goes so far as to deem Nvidia’s GPUs the “no-brainer choice” due to their computing power, flexibility, and the company’s CUDA software platform.
Still, Drury acknowledges that the market is becoming concerned about the pace of AI spending. And yet, Nvidia doesn’t see any sign of capex slowing down; quite the opposite.
The investor points out that Nvidia has “repeatedly stated” its projections of global data center capex reaching $3 to $4 trillion by 2030. That would certainly signify that there’s plenty of room for growth up ahead.
“In the meantime, investors can now scoop up shares at an attractive price,” the investor sums up. “Eventually, the market will start to value the company for all of the growth it’s delivering.” (To watch Keithen Drury’s track record, click here)
That view seems to be broadly reflected on Wall Street. With 39 Buys and 1 Hold and 1 Sell apiece, NVDA soars to a Strong Buy consensus rating. Its 12-month average price target of $257.72 implies gains just shy of 40%. (See NVDA stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
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.