Investors in Nvidia (NASDAQ:NVDA) were met with an 11% decline in the stock price overnight, as the broader market experienced a tumultuous ride. The company saw its shares struggle to maintain the $94 mark before the market opened, having closed the previous Friday above $107.
Major stock indices took a hit, with the Nasdaq down almost 6%, the S&P down nearly 4.5%, and the Dow Jones falling over 3%. This plunge followed a panicky trading session in Japan, where a 12.4% drop erased the market’s gains for the year.
Is Nvidia a Bargain Worth Considering?
Nvidia’s market capitalization dwindled to $2.35 trillion, a sharp decline from over $3 trillion just a month ago. As of now, the company is trading at 19 times its estimated fiscal 2025 sales of $120 billion.
Despite this volatility, reassurance from Chicago Federal Reserve President Austen Goolsbee that the Fed stands ready to intervene if needed helped soothe investor worries before the market opened at 9:30 a.m.
Nvidia is set to unveil its second-quarter earnings on August 28, with analysts anticipating revenue of $28.5 billion and earnings of 64 cents per share.
Prior to the recent drop, analysts had pegged a price target of $144 per share for Nvidia stock, signaling a substantial potential gain from current levels.
Although concerns arose due to a Department of Justice probe into its acquisition of Run.ai, other aspects of the company’s operations remain promising. Meta Platforms (NASDAQ:META) announced its plans to have 350,000 Nvidia H-100 chips in operation by year-end, while Nvidia is actively developing generative AI models based on Meta’s Llama 3.1 Large Language Model (LLM).
Nvidia’s stronghold in the AI market stems from a combination of exceptional software and hardware. Nvidia Cuda software stands as an industry standard, supported by a range of application program interfaces (APIs) that enhance its capabilities.
The Road Ahead for NVDA Stock
Nvidia is anticipated to rebound swiftly from its recent lows; however, investors should bear in mind that they are investing in future projections for 2026 rather than solely the present performance.
On the date of publication, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor held a LONG position in NVDA.
