Nvidia beat earnings targets and its outlook was solid. But it wasn't enough to appease Wall Street as the AI powerhouse apparently missed what one analyst called "bullish whispers."
Nvidia stock tumbled Friday after the chip giant reported better-than-expected fiscal third-quarter results. The problem apparently was its forecast which was only modestly better than what Wall Street expected. The shares shed 3.2% to close at 141.95.
Some analysts and investors were clearly expecting more from the AI powerhouse.
Bernstein Research analyst Stacy Rasgon said the forecast was "perhaps a touch below some of the more bullish whispers."
But it was still "respectable enough amid supply constraints," he said in a client note. The forecast was also "likely conservative given an uptick in Blackwell FQ4 outlook vs prior expectations and Hopper commentary that seems to point to further upside," Bernstein argued.
Nvidia stock was downgraded by a Phillip Securities analyst Friday, citing recent price moves, although he raised his target price to $160 from $155.
Melius Research analyst Ben Reitzes, who kept a buy rating on Nvidia and downplayed worries about supply constraints, reaffirmed his upbeat view of the stock in a Friday note.
"How many times do you hear Nvidia is too big and what goes up, must come down?," he wrote, noting the chipmaker's impressive run.
"Which stock would you rather own today?" he wrote. "You want a company in tech who is not going to complain about seasonality near-term? Check. Want the only mega cap in tech growing over 50% next year? Check. No wonder this stock is being bought on dips – can you afford not to be overweight?"
Nvidia stock fell 3.1% to 142.08 Friday afternoon, still holding the 140.76 consolidation buy point, according to MarketSurge. Shares of the new Dow Jones component fractionally higher for the week after briefly popping to a record 152.89 Thursday morning.
