:max_bytes(150000):strip_icc()/GettyImages-2168167187-85ed9d8773544c2e8933e8e8e0cf8819.jpg "Nvidia Tumbles To Start September, Leading Chip Stocks Slump")
:max_bytes(150000):strip_icc():format(jpeg)/GettyImages-2168167187-85ed9d8773544c2e8933e8e8e0cf8819.jpg)
Key Takeaways
- Nvidia shares fell as much as 8% in intraday trading Tuesday, continuing its descent after slipping last week following a sales forecast that came up short of lofty expectations.
- Even with its recent slump, Nvidia remains the best-performing stock in the S&P 500 this year, up more than 120% from the start of 2024.
- Analysts said they remain bullish on Nvidia stock, citing robust demand for the company’s AI chips.
September got off to a rough start for chip stocks on Tuesday, with Nvidia (NVDA) leading the slump as markets continued to digest last week’s earnings report from the artificial intelligence (AI) chipmaker.
Nvidia shares fell as much as 8% to a three-week low in intraday trading Tuesday. Other chip stocks were also lower, with Micron Technology (MU) and Intel (INTC) shares down more than 5%.
Nvidia’s second-quarter results beat analysts’ estimates, as did its outlook for the current quarter, though it may have fallen short of investors’ increasingly lofty expectations. Its stock slumped more than 6% last Thursday, a day after the earnings release.
Nevertheless, analysts remain bullish on the stock in the long term. JPMorgan analysts raised their price target for Nvidia’s stock by nearly 35%, noting strong demand for the company’s Grace Hopper line of chips offset a 2-month delay of its next-generation Blackwell system. Analysts at Jefferies and Wedbush also said the report pointed to continued strong demand for Nvidia’s chips.
Bank of America analysts pointed to the rising costs of rolling out the Blackwell system and the effect that could have on margins as one potential headwind for the company. However, the analysts maintained a “buy” rating and raised their price target, recommending investors “ignore [the] quarterly noise” and focus on Nvidia’s dominance in the generative AI chip market.
Even with its recent losses, Nvidia is still the best-performing stock in the S&P 500 this year, with its shares up more than 120% from the start of 2024.