Nvidia’s stock recently took a tumble, dropping about 20%, and folks on Wall Street are watching closely. The stock of this AI chip biggie went down to the $170–$175 range. Usually, a drop like this scares people, but many think it’s a good reset, not a bad sign.Nvidia had trouble going up after failing to pass the $200–$210 mark. The stock traded sideways for about six months before pulling back. That helped cool things off, setting the stage for a possible comeback.Even though the price went down, Nvidia’s future still looks good. After about half a year of not moving much, some think the stock might have hit a low point around where it is now. The pullback could be making way for Nvidia to go up again.
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Good Profits Paint a Different Story
Nvidia’s stock might be down, but its business is doing well. The company just released another good earnings report, beating what people expected for both sales and future predictions. Nvidia reported about $57 billion in sales, better than the expected $55 billion.
Looking forward, the company thinks fourth-quarter revenue will reach $65 billion, which is much higher than the market estimates of around $62 billion. Nvidia also predicted a great 75% gross margin, showing that the company has pricing power and still leads in AI chips.Even with these great results, Nvidia’s stock didn’t jump after earnings. Instead, shares went down as part of a larger pullback in AI stocks. This shows that the AI market is cooling off, but demand for AI hardware is still strong as more industries start using artificial intelligence.
Why Wall Street Still Likes Nvidia
Nvidia’s pullback wasn’t the only one. Other big AI and semiconductor stocks also went down. Broadcom dropped more than 20%, while AMD and Marvell fell around 25%. Oracle, usually seen as a stable tech stock, dropped nearly 50%. More risky AI stocks like Nebius, CoreWeave, and IREN fell even more.Even with this widespread sell-off, there aren’t many signs of serious problems in the business. Many think the drops are just a reset after months of big gains, not the start of a long downturn.That reset has made Nvidia’s value look better. The stock now trades at about 18 times future earnings, while expected earnings growth averages about 30% yearly over the next few years. Because of this, Nvidia’s value might be low compared to how much it could grow.Wall Street is still hopeful. The average 12-month price target for Nvidia is about $250, meaning there’s a chance for it to go up a lot from where it is now. There are still risks, like a possible slowdown in AI spending, but many think Nvidia’s recent correction could be the start of its next rise.
