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.

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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

Kosta has been working in the crypto industry for over 4 years. He strives to present different perspectives on a given topic and enjoys the sector for its transparency and dynamism. In his work, he focuses on balanced coverage of events and developments in the crypto space, providing information to his readers from a neutral perspective.