On Tuesday, the market value of Nvidia Corp. dropped by $279 billion. This was the biggest loss for any company in a single day.
That’s what Dow Jones Market Data says, and it happened at the same time as a big drop in chip stocks in general. Nvidia stock (NVDA -9.53%) fell 9.5% on Tuesday, making it one of the worst losers in the PHLX Semiconductor Index. 7.75% SOX
This is the first time that Nvidia’s stock has gone down since it reported quarterly earnings last week. This is a big deal because Nvidia sets the tone for the chip industry.
Analysts say that even though buyers didn’t like Nvidia’s most recent earnings report, other companies would still want to be where the chip giant is.
What did Wall Street not like about Nvidia’s most recent results and guidance? Rosenblatt Securities analysts Kevin Cassidy and Hans Mosesmann said that the company’s fast product cycle was to blame for the expected drop in gross profits.
That’s a “high-class problem” to have all around, and Rosenblatt is still excited about Nvidia shares. Before the market opened on Tuesday, analysts said that the company’s current Hopper chip line is “much stronger” and that the new Blackwell line will be “ramping hard” in the January quarter. The price they want the stock to reach is $200.
To get more specific about margins, Nvidia thinks that gross margins could be between 72% and 73% in the January quarter. This is lower than recent highs in the mid-70s, but still high.
After Nvidia’s earnings report, which Harsh Kumar of Piper Sandler admitted didn’t quite live up to investors’ hopes, he also supported the stock.
A lot of the worries about the print are unfounded, he wrote over the weekend. “Blackwell revenues are mostly on track and set to ramp up through the end of this year.” Kumar also talked about how popular Hopper is and how it will likely get even more popular in the second half of the fiscal year.
He is rated as overweight, and the price goal for him is $140.
Cantor Fitzgerald’s C.J. Muse, on the other hand, talked about the delays in shipping Nvidia’s Blackwell products and defended the stock.
Before Nvidia’s report, investors were afraid that the first shipments of Blackwell would be late. Muse wrote that “the concern is real, but not nearly what many have made it out to be.”
He wrote early Tuesday that a one- to two-month delay “makes little to no difference to our thesis on the name” because Nvidia is still seeing more demand than supply. He also said that the current Hopper line sets Nvidia up to keep up its beat-and-raise routine through the rest of the fiscal year.
According to Muse, the new “bogey” price of $4.50 may make people who want to buy less sure that the company will earn $5 per share next year. He did say, though, that “shares are only trading at 28x that reset bogey—far too cheap for this best-in-class asset.”
He thinks Nvidia shares are too expensive and wants them to reach $175.
Daniel Ives of Wedbush Securities supported Nvidia shares on Tuesday afternoon, after the stock dropped.
“Looking back, Nvidia has changed the tech and global landscape. Its [GPUs] have become the new oil and gold in the IT world, and its chips are driving the AI revolution and are the only ones that matter for now,” Ives wrote.
