By Adam Clark
Nvidia stock was edging down early Monday. The chip maker is still getting more positive assessments from Wall Street even as the broader market looks to be suffering from nerves over its steep rally.
Nvidia shares were down 0.7% at $125.74 in premarket trading. The stock closed down 3.2% on Friday.
Having briefly become the world's most valuable company last week, Nvidia has now dropped back behind Microsoft and Apple in market value.
Nvidia shares have risen 156% so far this year through Friday's close. That compares with a 15% rise in the S&P 500 index and a 18% rise in the Nasdaq Composite Index over the same period. The rapid rise has created concerns that its valuation could be stretched, despite its strong revenue and profit growth on the back of demand for its chips to train artificial-intelligence technology.
However, Wall Street analysts are still backing the stock to go higher.
"Nvidia is in control of the ecosystem on both the hardware and software front and their current cadence of new generations should make that lead only grow further," wrote Jefferies analyst Blayne Curtis in a research note Sunday.
Curtis pointed to Nvidia's NVL72 liquid-cooled rack systems, which contain either 36 or 72 of its graphics-processing units, as the next innovation in AI infrastructure. The Jefferies forecast calls for Nvidia to generate $164.6 billion in data-center revenue in 2025, compared with consensus forecasts for $141.7 billion.
Curtis raised his target price on Nvidia stock to $150 from $135, keeping a Buy rating.
Meanwhile, Nvidia has signed a deal to deploy its technology at data centers owned by Qatari telecoms group Ooredoo in five Middle Eastern countries, Reuters reported Sunday, citing an interview with Ooredoo's chief executive. It's the company's first large-scale launch in the region, with Nvidia facing limits on exports of its most advanced chips to the Middle East.
Among other chip makers, Advanced Micro Devices was down 0.1% and Intel was rising 0.2% in premarket trading.
Write to Adam Clark at adam.clark@barrons.com
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(END) Dow Jones Newswires
June 24, 2024 09:27 ET (13:27 GMT)
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