Nvidia got a rare stock downgrade on Wall Street. Experts have concluded that it would be hard to significantly experience more dramatic performance improvements since the stock price has increased about tenfold since the end of 2022.
According to Bloomberg, New Street Research, a US Wall Street market analysis firm, adjusted its investment opinion on Nvidia from “buy” to “neutral” the previous day. The target stock price was $135, 8% higher than the current $125.83.
Pierre Ferragu, an analyst at New Street Research, explained that Nvidia’s stock price has already been “fully valued.” It increased 240% last year and 156% this year. He also mentioned that a strong scenario is only possible after 2025.
While Nvidia’s performance is solid, its current market capitalization is pricey. New Street noted that when Nvidia’s past growth rate slowed to 10%, its price-to-earnings ratio (PER) stayed at 20 times, but it is now over 40 times. “NVIDIA’s monopoly is still effective, but we will become buyers again after a steady decline,” they added.
However, pessimism about NVIDIA is still minor. This year, Germany’s DZ Bank and New Street Research were the only ones that downgraded NVIDIA’s rating. According to TipRanks.com, only three of the 41 analysis institutions on Wall Street had a “neutral” opinion.
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