Nvidia’s Stock Faces Potential Correction Amid Valuation Concerns

Nvidia has been a top performer in 2024, but analysts are warning of potential challenges ahead.

Following a staggering $279 billion loss in market capitalization on September 4, many expect a correction after the stock peaked at $140.

Technical analyst Alan Santana highlighted a double-top pattern on Nvidia’s year-to-date chart, suggesting a bearish reversal. The peaks occurred on June 20 at $139.80 and October 17 at $140, separated by a dip to $92.23. He noted that both peaks closed lower, accompanied by a bearish engulfing candle and declining trading volume, signaling a possible downturn. He advises investors to take profits and consider re-entering near support levels if a correction occurs.

Despite these bearish signals, Nvidia’s valuation is driven by strong demand in AI and data centers. The stock currently trades at $137.28, reflecting a 185% year-to-date return.

READ MORE:

Historic $1.1B Deal Marks the Largest Acquisition in Crypto History

While some analysts caution about overvaluation—given Nvidia’s market worth at 11.7% of U.S. GDP—Wall Street remains bullish. Firms like Citi and Morgan Stanley have raised their price targets to $150, with Cantor Fitzgerald aiming for $175. BofA Securities’ Vivek Arya increased his target from $165 to $190.

As Nvidia’s earnings call on November 19 approaches, investors will gain further insight into the stock’s fundamentals amidst market speculation.

Kosta Gushterov