Why Nvidia stock fell today

What happened

Since launching its Virtual Graphics Technology Conference 2022 (GTC 2022) on Monday, Nvidia (NASDAQ: NVDA) issued (in my opinion) about 15 separate press releases, extolling, among other things:

And yet shares of the semiconductor stock are falling — down 3.1% as of 10 a.m. ET Wednesday.

Image source: Getty Images.

So what

As a Reuters article covering Tuesday’s announcements makes clear, artificial intelligence appears to be Nvidia’s main focus at this conference. That article quoted CEO Jensen Huang, who said, “Data centers are becoming AI factories, processing and refining mountains of data to produce intelligence.” He also quoted Bob O’Donnell, chief analyst at TECHnalysis Research, who claimed that Nvidia’s latest advancements make it a bigger threat to data centers and cloud computing companies in Intel (NASDAQ: INTC) and AMD (NASDAQ: AMD).

But not everyone is impressed.

On the one hand, JP Morgan Analyst Harlan Sur observed Wednesday morning that Nvidia remains “1-2 steps ahead of its competitors” in the areas of artificial intelligence, high performance computing, games and autonomous vehicles as well. On the other hand, points out that Barclays Capital city, Citigroup — and JPMorgan too! – are maintaining the exact same $350 price targets on Nvidia shares that they had prior to the start of GTC 2022.

Now what

Granted, Nvidia stock is only priced around $260 today, so a price target of $350 implies a generous 35% upside potential. Granted, these three banks all have buy ratings on Nvidia.

But the fact remains: nothing the chipmaker said in the past two days – not one of 15 separate press releases – was impressive enough to encourage any of these banks to change their stance and to raise their price targets on the Stock. As Barclays commented, product announcements so far have been largely in line with expectations, and Nvidia management hasn’t raised its guidance one bit.

So why is Nvidia stock down on Wednesday? Investors simply wanted more – and they didn’t get it.

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JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Citigroup is an advertising partner of The Ascent, a Motley Fool company. Rich Smith has no position in any of the stocks mentioned. The Motley Fool owns and recommends Advanced Micro Devices, Intel and Nvidia. The Motley Fool recommends Barclays and recommends the following options: $57.50 long calls January 2023 on Intel and short $57.50 January 2023 calls on Intel. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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