One advantage of Nvidia not rocketing higher amid recent chip-stock enthusiasm is there’s less room to fall when things turn sour. The chip maker looked to be benefiting Thursday as it weathered a selloff in the semiconductor sector.
Nvidia shares were up 0.3% at $215.08 in morning trading.
That’s a relatively modest loss compared with some of its peers, after rival Broadcom disappointed the market with its earnings. Broadcom was down 15% and Advanced Micro Devices was dropping 4%.
There wasn’t much direct read-across from Broadcom’s earnings to Nvidia. The specific issues spooking investors looked to be potential competition in Google’s custom-chip supply chain and margin dilution. Neither is an issue for Nvidia.
Some of Broadcom’s previous earnings updates have seen the company take an aggressive stance on its chances of eating into Nvidia’s market share in AI chips, but there was little sign of that this time.
“Nvidia’s incremental sequential top line growth each quarter
continues to be a higher number than the combined revenue of all competitors, with market share hovering at about 85% and no tangible share loss in the last two years,” wrote Morgan Stanley analyst Joseph Moore in a research note on Wednesday.
Moore has an Overweight rating and $288 target price on Nvidia stock.
Nvidia has been trading out of step with the wider chip sector for a while now. Nvidia stock is up 15% this year so far through Wednesday’s close, against a 96% rise for the PHLX Semiconductor Index.
“Nvidia is growing earnings at 80% year over year and trading at a PEG [price/earnings to growth] ratio below 0.5, yet the stock has done relatively little by comparison…we recently added it to our value portfolio,” said Nancy Tengler, CEO of Laffer Tengler Investments. “I’m more interested in owning sustainable growth names than catch-up names.”
Nvidia was a recent Barron’s stock pick when shares were trading at around $226.
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