The post ChatGPT-4o sets Nvidia price target following rare downgrade on valuation concerns appeared on BitcoinEthereumNews.com.

The blue-chip chipmaker and semiconductor giant Nvidia (NASDAQ: NVDA) has been one of the most exciting stocks throughout the year. However, New Street Research recently issued a rare downgrade for Nvidia, moving its rating from “buy” to “neutral.” Pierre Ferragu, an analyst at New Street Research, cited valuation concerns as the primary reason for the downgrade. Nvidia’s stock has seen an extraordinary rise, gaining 154% this year on top of a nearly 240% increase in 2023.  Despite the robust performance and the company’s strong fundamentals, Ferragu believes the stock is “getting fully valued.” Further price increases will depend heavily on a significantly improved outlook beyond 2025, a scenario on which Ferragu does not yet have strong conviction, according to Bloomberg This cautious stance is vital for traders and investors considering the potential for a market correction or stagnation if Nvidia’s growth does not meet these high expectations. Key valuation metrics Analyzing Nvidia’s valuation metrics provides a clearer picture of the downgrade’s rationale. Nvidia’s trailing PE ratio is 73.63, while the forward PE ratio is 46.44. These figures are substantially higher than the industry average, indicating that investors are currently paying a high price for Nvidia’s earnings.  The price-to-sales ratio is at 25.58, reflecting a premium valuation compared to its peers. With a PEG ratio of 1.50, Nvidia’s stock price relative to its earnings growth is on the higher side, suggesting overvaluation if growth expectations are not met. Over the past 12 months, Nvidia reported revenues of $79.77 billion and earned $42.60 billion in profits, translating to earnings per share (EPS) of $1.71. Key income statement figures include a gross profit of $60.08 billion, operating income of $47.74 billion, net income of $42.60 billion, and EBITDA of $50.68 billion.  These robust figures underscore Nvidia’s strong financial health and highlight the expectations…

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Filed under: News - @ July 7, 2024 6:22 pm