logo
NVDA Stock Is Not 'Fully Pricing in' Its Positive Attributes, Analyst Says

NVDA Stock Is Not 'Fully Pricing in' Its Positive Attributes, Analyst Says

Yahoo02-05-2025
Nvidia's (NVDA) shares are not fully pricing in all of its upbeat catalysts, and it's "certainly a buy," Keybanc analyst John Vinh told Yahoo Finance recently.
Moreover, it's "a bit premature" to be concerned about Nvidia's competition from custom AI chip makers, Vinh believes.
NVDA's Attractive Valuation
NVDA stock is failing to price in "everything," Vinh said. And with the shares changing hands at less than 20 times analysts' average estimates, the name is trading for far less than its historical price-earnings ratios of 35 to 40 times, Vinh noted.
"Premature" to Worry About Competition From Custom Chips
Since we're in the "very early stages of generative AI," neither NVDA nor customer AI chip makers are going to capture the entire AI chip market, Vinh noted.
Further, NVDA "is very far ahead of the competition," while there is "limited" validation of the custom chips made by Broadcom (AVGO), Vinh noted. AVGO is seen as a leader of the custom chip space.
But aside from Alphabet (GOOG), which uses AVGO's custom chip, there is "limited proof" that AVGO's processors can successfully compete with those of NVDA, the analyst reported.
Export Controls Are "A Little Bit of an Overhang" on NVDA Stock
Export controls on NVDA's chips are "a concern and a little bit of an overhang on" NVDA stock, the analyst stated. "We'll have to see how it plays out," he added.
While we acknowledge the potential of NVDA, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about this .
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires
Disclosure: None. This article is originally published at Insider Monkey
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Wall Street giant issues stark message on S&P 500
Wall Street giant issues stark message on S&P 500

Yahoo

time3 hours ago

  • Yahoo

Wall Street giant issues stark message on S&P 500

Wall Street giant issues stark message on S&P 500 originally appeared on TheStreet. The S&P 500 is back notching up all-time highs, capping off what's been a remarkable rebound. Things look very different for investors now, who are breathing easier after a rough start to the year. 💵💰💰💵 However, under the surface of this optimism, there is a hidden imbalance that continues to grow quietly. This risk is likely to turn today's party into tomorrow's headache if the momentum swings the other way. Over the past couple of years in particular, the 'Magnificent 7', which includes Apple, Microsoft, Nvidia, Amazon, Alphabet, Meta, and Tesla, have turned the S&P 500 into their personal growth machine. Back in mid-2023, these mega-caps accounted for a whopping one-third of the index's market value. By early 2024, that number grew even more, creeping up to 35%. That figure is now pushing toward 40%, the highest concentration level in more than 50 years. It's not hard to gauge, though, if we look at the scoreboard. Nvidia is up an eye-popping 936% over the past three years, Meta's up 326%, Amazon popped 93%, and Apple notched a 44% gain, beating the broader index by a country those blockbuster runs supercharged passive portfolios but also rewired the S&P 500. Critics say index investors aren't getting true diversification anymore. Instead, they're loaded by a select few pricey tech stocks that could switch gears in a regulatory crackdown or if earnings miss following a major stumble. The risks are too real to ignore for savvy investors. Nvidia's sky-high valuations continue raising eyebrows (having flirted with $4 trillion market cap recently). Apple faces antitrust probes in Europe. Google's ad business is under fresh scrutiny. Also, EV giant Tesla's once-torrid growth has cooled off. More Tech Stock News: Tesla's next bet could flip the robotaxi race Cathie Wood shells out $13.9 million for one high-stakes biotech stock Apple's quiet shake-up could redefine its future It's giving investors flashbacks to the 'Nifty Fifty' collapse of the 1970s, when overconfidence in a few blue chips ended in major pain. Wall Street giant Apollo has just put out a fresh warning on those holding the S&P 500. According to Apollo Chief Economist Torsten Sløk, investors looking for the traditional 'broad diversification' from the S&P 500 are essentially betting on the Mag 7, which continues powering ahead. Collectively, these mega-cap titans now account for roughly 40% of the S&P 500's total market value. That's a paradigm shift from what the benchmark index intended to do, which was to spread your risk across 500 companies, sectors, and problem is, when you have just seven names propping up almost half the index, a bad day for Big Tech can result in a massive setback for everyone. And tech stocks aren't living in a bubble. They're effectively linked to consumer spending, interest rates, and geopolitical tensions, and any surprise can rattle these giants quickly. Think of surprise antitrust crackdowns, AI hype cooling off, or disappointing earnings. Any of those worrying trends could send the Mag 7 sliding, dragging the entire index with them. It's no wonder that many strategists are concerned about how it's shaping their portfolios. For those worried about the major concentration risk, it will be more fruitful to dig deeper and hunt for smaller caps, dividend payers, or international stocks to look for real diversification. Apollo's takeaway is blunt. Passive index funds aren't the safety net they once were, and if you're in the S&P 500, you're basically betting all-in on Big Tech, regardless of whether you intend Street giant issues stark message on S&P 500 first appeared on TheStreet on Jul 11, 2025 This story was originally reported by TheStreet on Jul 11, 2025, where it first appeared. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

U.S. Senators Warn Nvidia CEO Jensen Huang about His Trip to China
U.S. Senators Warn Nvidia CEO Jensen Huang about His Trip to China

Business Insider

time4 hours ago

  • Business Insider

U.S. Senators Warn Nvidia CEO Jensen Huang about His Trip to China

Two U.S. senators—Republican Jim Banks and Democrat Elizabeth Warren—sent a letter to Nvidia (NVDA) CEO Jensen Huang on Friday, urging him to be cautious during his trip to China. They asked him not to meet with any companies that are believed to be helping China get around U.S. export restrictions, especially those connected to the Chinese military or intelligence agencies and that are listed on the U.S. export blacklist. The senators warned that even appearing to support these companies could weaken U.S. efforts to control advanced chip exports. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. Huang's trip was scheduled for the same day the letter was sent. In response, an Nvidia spokesperson said that when American technology leads the global standard, 'America wins,' and noted that China has one of the world's largest groups of software developers. They added that AI systems should be designed to run best on U.S.-based hardware, which would encourage other countries to choose U.S. tech over alternatives. However, the concern from lawmakers is that Huang's meetings could expose weaknesses in current rules and send the wrong signal about America's stance on protecting its technology. This issue ties into recent tensions between Nvidia and U.S. regulators. At the Computex trade show in May, Huang praised President Donald Trump's decision to loosen some AI chip export rules and called the earlier restrictions ineffective. But newer limits put in place in April could still cost Nvidia up to $15 billion in lost revenue. Lawmakers are now considering laws that would require chipmakers to verify where their products end up. There are also growing fears that Chinese companies like DeepSeek are helping the military and using fake companies to dodge the rules. Despite all this, Nvidia is reportedly preparing a cheaper version of its Blackwell AI chips specifically for the Chinese market. What Is a Good Price for NVDA? Turning to Wall Street, analysts have a Strong Buy consensus rating on NVDA stock based on 37 Buys, four Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average NVDA price target of $176.29 per share implies 6.7% upside potential.

Citi raises Super Micro target, but warns on margin pressures
Citi raises Super Micro target, but warns on margin pressures

Yahoo

time4 hours ago

  • Yahoo

Citi raises Super Micro target, but warns on margin pressures

-- Citi raised its price target on Super Micro Computer (NASDAQ:SMCI) to $52 from $37 a share in a note Friday, citing improving demand for AI servers and the ramp of Nvidia's GB200/300 platforms. However, the bank kept a Neutral rating on the stock, pointing to increasing competitive pressure from Dell (NYSE:DELL) and HPE. 'Management sounds constructive on materialization of current commitments over the next two quarters as Blackwell GPU supply constraints ease,' Citi analysts wrote. However, they added, 'We remain concerned on margins given increased momentum and competitive efforts by DELL and HPE, which we believe will temper margin expansion expectations.' Super Micro is expected to report fiscal fourth-quarter results in early August. Citi forecasts revenue of $6.07 billion, up 13.4% year over year and 32% quarter over quarter, and EPS of $0.45, roughly in line with consensus. For the first quarter of fiscal 2026, Citi estimates revenue of $7.02 billion and EPS of $0.65, both above the Street. Citi also highlighted several key focus areas for investors: '1) Global manufacturing footprint amidst tariff implications; 2) Hopper to Blackwell GPU platforms transition; 3) Ability (OTC:ABILF) to deliver on their first-to-market advantage for new GPU platforms amidst increased competitive environment; and 4) DCBBS and DLC 2 emergence and ramp into 2H.' While raising its price target on improved market multiples and peer valuation trends, Citi reiterated that 'we remain Neutral on the name amidst continued broader industry demand (albeit lumpy).' Related articles Citi raises Super Micro target, but warns on margin pressures Air India crash probe reveals pilot cut fuel flow to engines S&P 500 falls after Pulte claims Powell considering resignation

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store