HomeFinancial MarketsNvidia Stock Gets a Rare Downgrade Amid Valuation Concerns

Nvidia Stock Gets a Rare Downgrade Amid Valuation Concerns

The majority of analysts believe that the stock of chipmaker Nvidia will just keep on going up even after gaining 161.22% year-to-date. But New Street Research analyst Pierre Ferragu is taking a different route.

According to Ferragu, Nvidia stock is “getting fully valued” and has little to no room to go up anymore. This downgraded it from “Buy” to “Neutral” while setting a price target of $135 compared to Friday’s close price of $125.83 per share.

Ferragu believes that further surge for shares of Nvidia “will only materialize in a bull case, in which the outlook beyond 2025 increases materially” while pointing out that New Street Research “do not have the conviction on this scenario playing out yet.”

It is quite unusual for Nvidia’s stock to get a downgrade, especially since the company has been at the center of the recent Artificial Intelligence boom.  Out of 57 analysts polled by Yahoo Finance last month, 53 of them had either “Strong Buy” or “Buy” rating on the stock. However, even analysts who are bullish on Nvidia recognize valuation concerns.

Nvidia’s shares plunged on Monday after a major sell-off before rebounding by the end of the week. The stock then dipped on Friday by 1.91% with the slide marginally continuing in the after hours trading. 

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