Shares of Nvidia (NASDAQ: NVDA) have rallied 13% in July thanks to the broader rally in semiconductor stocks, which is evident from the 10% jump in the PHLX Semiconductor Sector index. But Wall Street seems to be apprehensive about the tech giant's prospects.
The graphics specialist has been the subject of downgrades by Wall Street analysts of late, leading to a small pullback in its stock price in recent sessions. So should investors buy Nvidia stock following its pullback and set their portfolios up for long-term gains given the solid catalysts the company is sitting on? Or should they heed analysts' warnings about tough times ahead for the chipmaker and avoid the stock? Let's find out.
Blayne Curtis of investment bank Barclays lowered his price target on Nvidia stock from $295 to $200 a share. Curtis said he believes that the recent rally in semiconductor stocks is going to be short-lived, as companies in this sector could witness big cuts to their earnings estimates in the coming year and a half. Ross Seymore, an analyst at Deutsche Bank, holds a similar view and said he expects the semiconductor industry to remain in decline.
Source Fool.com