Nvidia's stock keeps dropping this week — adding to a massive hit to the S&P 500. But analysts think the selling is overdone.
Shares of the AI company are down 13% in just a week, erasing more than $428 billion in market value. That's more than what 96% of the stocks in the S&P 500 are worth, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSurge.
But when will the torture end? Analysts say all this selling will be in the past soon enough.
What's Next For Nvidia?
Following the selling this month, analysts are more bullish for the next 12 months for Nvidia stock. They're calling for Nvidia to trade for 130.38 in a year's time. If they're right, it would mark implied upside of more than 10%.
Seeing Nvidia halt its slide would be a welcome change for investors. And there's strong profit forecasts to back it all up. Analysts also think Nvidia will earn $2.71 a share this fiscal year, up an astounding 108% from the same year-ago period.
You'd be hard-pressed to find another S&P 500 stock of this size growing at that clip.
Is Nvidia The Next Intel?
Investors who were around in the 2000s tech-stock boom might fear a repeat of a semiconductor mania. Back then shares of Intel soared on glowing forecasts for the internet.
But the following two decades have disappointed Intel investors. Is Nvidia headed for a similar fate? No, says Nicholas Colas of DataTrek Research.
There are some parallels. In 2000, Intel's revenue was $33.7 billion. Adjusted for inflation that is $60.8 billion, Colas says. That's nearly identical to Nvidia's revenue last year of $60.9 billion. It's a scary comparison, as Intel's revenue plunged to $26.5 billion in 2001.
But he also points out Nvidia's profitability is superior to Intel's. Nvidia is also spending more on R&D than Intel was.
"We would therefore not be surprised to see the stock exhibit some volatility in the coming weeks, but the numbers speak for themselves," Colas said. "This is not Intel in 1999, but something much better positioned to hold investor confidence."
Three-Day S&P 500 Losses
Market value drops in the past three days
| Company | Ticker | 3-day loss | Loss ($ millions) |
|---|---|---|---|
| Nvidia | -12.9% | -$428,348 | |
| Broadcom | -11.6% | -$97,147 | |
| Apple | -2.9% | -$94,151 | |
| Qualcomm | -11.6% | -$29,306 | |
| Micron Technology | -9.4% | -$15,968 | |
| Applied Materials | -7.3% | -$14,895 | |
| Oracle | -3.4% | -$13,366 | |
| Meta Platforms | -0.9% | -$11,947 | |
| Costco Wholesale | -2.6% | -$9,935 | |
| KLA | -8.0% | -$9,329 |
