Morningstar has kind words for Nvidia Monday.
What happened
After four straight trading days of unmitigated selling, shares of graphics and crypto-miningsemiconductormanufacturer Nvidia(NASDAQ:NVDA) reversed course Monday -- and bounced nearly 5%!
Of course, those morning gains proved fleeting, but as of 2:15 p.m. EDT, Nvidia stock is still holding onto a respectable 3.3% gain. (And you have to wonder if it might be up even more if the stock market hadn't suddenly gone toheck in a handbasket Monday.)
So what
Investors can send their thank-you notes directly to Morningstar, which was quoted Monday commenting that "after taking a fresh look at our thesis on Nvidia, we are raising our moat rating to wide from narrow, thanks to intangible assets related to the design of graphics processing units (GPUs)."
Now what
Coming on the heels of similarly positive notes in recent weeks from investment banks including KeyBanc, BMO Capital Markets,and Mizuho, which have posited price targets of anywhere from $900 to $1,000 for Nvidia stock (which only costs about $750 Monday), it seems there's a consensus forming on Wall Street that the time for selling is over, and the time for buying is here -- and maybe they're right.
Nvidia's price strength Monday in the face of a broad stock market collapse certainly suggests that investors are tired ofselling Nvidia stock. But all that being said, when I look at Nvidia's valuation Monday -- 85 times trailing earnings, and even 82 times free cash flow -- I cannot help but think that the stock remains richly priced.
And Wall Street's optimists notwithstanding, I fear Nvidia stock may still have farther to fall.
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