Is NVIDIA’s market correction a concern or an opportunity?

NVIDIA Corp. NASDAQ:NVDA has consistently demonstrated its ability as a leader in innovation and growth, particularly in the semiconductor industry and the development of artificial intelligence (AI).

After an impressive start to the year, marked by a substantial 75% year-to-date increase, NVIDIA recently saw a decline of nearly 11% from its 52-week high. This fix puts NVIDIA in a precarious position, raising questions about its near-term prospects.

Investors now face a crucial decision: Is this retreat a sign of further decline, warranting caution? Or does it represent a compelling opportunity to acquire shares in a company renowned for its resilience, growth and industry dominance?

NVIDIA stock enters correction

As shares of the semiconductor and AI giant have retreated, it has theoretically entered a correction. However, from a technical analysis perspective, the stock is taking a breather, sustainably moving back towards its rising 50-day simple moving average (SMA). — a good way to digest the recent surge.

On a higher time horizon, NVIDIA stock is currently in a steady uptrend, with the rising 50-day SMA serving as a potential buying opportunity as the market leader experiences a controlled pullback.

Basically, NVIDIA continues to amaze

Even though the stock has retreated in recent weeks, along with the broader market and its industry, NVIDIA continues to outperform and impress from fundamentals.

The company filed its latest earnings report on February 21. The renowned computer hardware maker beat expectations, reporting EPS of $5.16 for the quarter, beating the consensus estimate of $4.21 by a significant margin of 95 cents. NVDA’s quarterly revenue came in at $22.10 billion, beating analysts’ projections of $20.40 billion and marking a notable increase of 265.3% year over year.

Over the last year, NVIDIA has delivered impressive performance, with total EPS of $11.94. The company boasts a price-to-earnings (P/E) ratio of 72.55 and a forward P/E of 28. Looking ahead, analysts expect robust 12.92% earnings growth for NVIDIA over the next year, predicting a rise from $22.45 to $22.45. $25.35 per share.

Despite the recent correction, analysts continue to hammer the table on NVIDIA. The title remains one of the most popular, most updated and most sought after titles. Based on 41 analyst ratings, NVIDIA has a Moderate Buy rating and a price target of an upside near 6%.

However, several analysts have recently become bullish on the name and have chimed in by reiterating their rating and raising their target. On April 4, Susquehanna reiterated its rating on NVDA, along with its $1,050 price target, which saw upside of more than 17%. Four days later, KeyCorp analysts increased their target from $1,100 to $1,200, predicting a whopping 35.44% rise for the stock. Most recently, on April 10, Morgan Stanley increased its target from $795 to $1,000, a notable increase that saw a nearly 16% upside for the stock.

Additionally, institutions continue to buy and hold NVIDIA stock. Over the previous 12 months, institutional inflows totaled $660 billion, compared to just $47 billion in institutional outflows. Institutional ownership of the stock currently stands at an impressive 65.27%.

The bottom line

While the market grapples with these short-term considerations, NVIDIA’s future trajectory is undoubtedly bright, as the company remains at the forefront of the AI ​​growth wave. One thing is certain: NVIDIA’s track record of innovation and growth continues to capture the attention of investors, shaping its narrative in the ever-changing stock market landscape.

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