Nvidia (NVDA 1.66%) is experiencing a significant upward movement on Tuesday, marking a strong recovery in the stock market following the declines observed on Monday. As of 12:48 p.m. ET, Nvidia’s share price surged by 2.4%. During the same timeframe, the S&P 500 index showed an increase of 2.6%, while the Nasdaq Composite climbed by an impressive 3%. Earlier in the trading session, Nvidia’s stock had even reached a height of 3% increase, reflecting investor confidence in the company’s market position and growth potential.
The decline in stock prices on Monday was primarily driven by intensified criticism from President Donald Trump directed at Federal Reserve Chair Jerome Powell regarding interest rate policies. However, the market is making a notable recovery, buoyed by emerging optimism from Washington concerning the ongoing trade war. In addition to the broader market’s positive momentum, Nvidia’s stock is likely also gaining traction due to favorable new analyst reports that were released on Tuesday morning, which may contribute to investor sentiment.
On Monday, the S&P 500 experienced a drop of 2.4%, while the Nasdaq Composite index fell by 2.6%. This widespread sell-off was not only attributed to macroeconomic concerns but also to specific news regarding Nvidia. A report surfaced indicating potential delays in the release of one of Nvidia’s upcoming chips due to undisclosed flaws, which led to a decline of approximately 4.8% in Nvidia’s share price during that trading day. Nevertheless, the stock is rebounding on Tuesday, following the upward trend of major indexes, suggesting resilience in Nvidia’s market performance.
Revised Price Targets for Nvidia by Analysts
In the early hours before the market opened on Tuesday, Barclays released updated coverage regarding Nvidia. Tom O’Malley, the lead analyst at Barclays for Nvidia, adjusted his one-year price target downwards from $175 per share to $155 per share, citing the pressures from tariffs and the ongoing trade war as influencing factors. However, O’Malley emphasized his positive outlook by maintaining an overweight rating on the stock, which is synonymous with a buy recommendation, indicating continued confidence in Nvidia’s growth despite the adjustment.
Bank of America also revised its price target for Nvidia, lowering it from $160 per share to $150 per share. Despite the reduction, the bank believes that the implications of the U.S. effectively prohibiting the export of Nvidia’s H20 AI processor to China have already been mostly factored into the stock’s current price. They anticipate that Nvidia will still report earnings per share of $3.97 for the current fiscal year, followed by an increase to $5.74 in the next fiscal year. The bank has reiterated its buy rating, reflecting an optimistic long-term view on Nvidia’s performance.
While both Barclays and Bank of America have adjusted their short-term valuation forecasts for Nvidia, their new price targets still indicate a potential upside of over 50% from the stock’s existing price. However, investors should remain vigilant, as macroeconomic and geopolitical conditions are evolving rapidly. The elements that underpin analysts’ price targets may shift unexpectedly, affecting investment strategies and market reactions.
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
