Wall Street analysts bullish on Nvidia, but writer cautious due to competition and valuation ratios.

From Nasdaq: 2024-09-21 11:09:00

Wall Street analysts are extremely bullish on Nvidia, with 51 out of 64 rating the stock as a buy and the consensus price target set at $149 per share, 29% above the current share price. Despite this, one writer is not convinced and explains why he’s not buying more Nvidia shares at this time.

While Nvidia is a leader in AI accelerator chips and powering language models like OpenAI’s ChatGPT, there are risks Wall Street may be overlooking. Competitors like AMD, Intel, IBM, and Qualcomm are challenging Nvidia with their own AI accelerator offerings, potentially threatening Nvidia’s market dominance and leading to a price correction.

Nvidia’s stock currently trades at high valuation ratios, which could be unsustainable if competitors gain traction in the AI accelerator market or if the generative AI bubble pops. Despite Wall Street’s optimism, some analysts are wary of a potential price correction in the future, leading them to hold their Nvidia shares rather than buy more.

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