Ultrahisham
03-11

Nvidia Corporation, a leader in the semiconductor industry, has experienced notable fluctuations in its stock performance recently. As of March 10, 2025, Nvidia’s stock closed at $106.98, marking a 30% decline from its record high in early January.

Valuation Metrics

This decline has impacted Nvidia’s valuation metrics. The trailing 12-month price-to-earnings (P/E) ratio has decreased to 36.4, the lowest since before the launch of ChatGPT in November 2022. The forward P/E ratio stands at 24, indicating that the stock is currently 41% cheaper than it was at ChatGPT’s release.

Analyst Perspectives

Analysts present mixed views on Nvidia’s prospects. Ben Reitzes of Melius Research maintains a “Buy” rating with a price target of $170, suggesting a potential 60% upside. He draws parallels between Nvidia’s current valuation compression and Apple’s situation in 2008, implying potential for strong future gains. Conversely, Gil Luria of D.A. Davidson holds a “Neutral” stance with a $135 price target, expressing concerns about peak demand for AI chips and increasing competition from companies developing their own processors.

Market Dynamics

The broader technology sector has also faced challenges. On a recent Monday, the tech sector lost approximately $759 billion in market capitalization, with Nvidia and Apple contributing significantly to this decline. This downturn reflects investor concerns about a potential recession and the sustainability of high spending on artificial intelligence.

Conclusion

Investors considering increasing their holdings in Nvidia should weigh these factors carefully. The stock’s current valuation metrics suggest potential undervaluation, and some analysts remain optimistic about its future. However, challenges such as market volatility, competition, and broader economic conditions warrant a cautious approach. As always, aligning investment decisions with individual financial goals and risk tolerance is essential.

Disclaimer: Please kindly do your own due diligence as this is a sharing article and in no means financial advise.

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Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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