Is It Finally Time to Sell Nvidia Stock?
Nvidia (NASDAQ: NVDA) has been one of the hottest stocks on the market since the beginning of 2023, clocking stunning gains of 799% and outpacing the S 500 index's 45% jump by a massive margin. This was due to the impressive growth in the company's revenue and earnings due to the healthy demand for its artificial intelligence (AI) chips.
This phenomenal surge is why Nvidia is now trading at a rich valuation. Its price-to-earnings (P/E) ratio of 77 is well above the Nasdaq 100 index's multiple of 32 (using the index as a proxy for tech stocks). This is why some Wall Street analysts are now concerned about the company's ability to sustain its red-hot rally.
New Street Research recently downgraded Nvidia from buy to neutral, citing the stock's valuation. Analyst Pierre Ferragu has a one-year price target of $135 on the stock, which points toward a very limited upside from current levels. Meanwhile, the stock's median one-year price target of $130, as per 62 analysts covering the stock, also indicates that it's unlikely to deliver more gains.
Source Fool.com
