Nvidia Stock: Investors vs. Analysts – Drivers of Muted Earnings Reaction

Nvidia’s NVDA -4.16% ▼ stock dropped sharply despite strong Q4 earnings, revealing tensions between bullish analysts and cautious investors. This divide stems from differing views on AI growth sustainability amid high valuations and emerging risks.

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What Are Key Drivers of Investor Caution?

Investors’ high expectations made beats routine, muting upside as growth rates slow from historical triple-digit peaks. Investors are fixated on AI spending sustainability, China export curbs, and rivals like DeepSeek, unlike analysts’ growth focus. Additionally, high valuation at 37x P/E (price-to-earnings ratio) amplifies scrutiny on forward risks over backward beats.

Hyperscalers’ custom chips like Amazon’s AMZN +1.00% ▲ Trainium and Google GOOGL +1.42% ▲ TPUs adds competitive pressure.

Nvidia Stock Performance

NVDA fell nearly 5.5% on February 26, its biggest single day drop in 10 months, wiping out $259 billion in market value after announcing fiscal Q4 results with record revenue of $68.1 billion. Shares hovered around $185 post-drop, down from monthly peaks near $220, reflecting profit-taking as the Nasdaq tech rally stalled.

According to TipRanks’ Stock Investors Tool, less than 0.1% of total portfolio investors added to their NVDA positions in the last seven days, while 6% reduced exposure over the last 30 days.

Analysts’ Views Post Results

Following Nvidia’s upbeat results, 28 analysts reiterated their Buy ratings, while only one maintained his Hold rating on the stock.

Robert W Baird analyst Tristan Gerra lifted his price target from $275 to $300, implying 62.3% upside potential. His update is based on a revised model showing Nvidia’s data center sales doubling year-over-year, thanks to strong demand for Blackwell GPUs from Microsoft MSFT -2.24% ▼ and Amazon Web Services AMZN +1.00% ▲ .

RBC Capital analyst Srini Pajjuri raised his price target from $240 to $250, suggesting 35.2% upside potential. He expressed surprise at NVDA’s sharp post-earnings drop after a strong report, blaming broader fears of an AI spending slowdown. Pajjuri dismissed AI bubble worries, citing fierce hyperscaler competition, no GPU overbuild signs, and ongoing supply shortages.

Meanwhile, Barclays analyst Thomas O’Malley remains hopeful, expecting more news likely coming from the recent Groq acquisition at Nvidia GTC in March. He believes this event could “potentially help break the stock free from the paralysis.” He called Nvidia “the most interesting name in the group,” while keeping his $275 price target intact.

Should You Buy Nvidia Stock?

On TipRanks, NVDA stock has a Strong Buy Consensus rating based on 37 Buys, one Hold, and one Sell rating. The average Nvidia price target of $273.38 implies 47.9% upside potential from current levels. Over the past year, NVDA shares have surged nearly 54%.

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