Tech Stocks Plummet Amid AI Fatigue and Value Rotation
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 9h ago
0mins
Should l Buy NVDA?
Source: NASDAQ.COM
- Tech Stock Decline: Over the past three months, technology stocks have been on a downward trend, with significant losses among major players in the last week alone, indicating a shift in investor sentiment from growth to value stocks amid increasing volatility.
- Market Performance Comparison: Since Halloween, the Russell 1000 Value index has risen by 8.4%, while the tech-heavy Russell 1000 Growth index has fallen by 3.7%, reflecting a growing preference for value stocks as investors exhibit fatigue towards growth stocks.
- Microsoft Earnings Impact: Following Microsoft's fiscal second-quarter results that exceeded Wall Street expectations, the stock plummeted 11% in a single day due to signs of slowing cloud revenue, marking the largest drop since March 2020 and highlighting the market's sensitivity to tech stock performance.
- Concerns Over AI Technology: Growing concerns about AI technology potentially disrupting the software industry have led to a nearly one-third decline in the IGV Software index since its September peak, illustrating investor caution regarding the future of the tech sector and its economic implications.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for NVDA is 264.97 USD with a low forecast of 200.00 USD and a high forecast of 352.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 171.880
Low
200.00
Averages
264.97
High
352.00
Current: 171.880
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is a full-stack computing infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. The Company’s segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing platforms and artificial intelligence (AI) solutions and software; networking; automotive platforms and autonomous and electric vehicle solutions; Jetson for robotics and other embedded platforms, and DGX Cloud computing services. The Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems, and Omniverse Enterprise software for building and operating industrial AI and digital twin applications.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Rising Capital Expenditure: AI hyperscalers have announced record capital expenditure plans for 2026, with global data center spending projected to reach $3 trillion to $4 trillion annually, positioning Nvidia as a key beneficiary.
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See More
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- Clear Competitive Advantage: Nvidia's GPUs are the preferred computing units for running AI workloads, and with the rollout of its next-gen Rubin architecture and a rebound in GPU sales to China, it is expected to further exceed performance expectations.
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See More
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- TSMC's Market Position: TSMC produced over 11,800 products across 288 different processes in 2024, solidifying its position as the world's largest semiconductor foundry and ensuring its critical role in the rapidly expanding AI industry.
- Strong Financial Performance: TSMC reported fourth-quarter revenue of $33.73 billion, up 25.5% year-over-year, with a profit margin of 48.3%, demonstrating its robust profitability and sustained growth potential in the market.
- Technological Innovation and Customer Demand: In 2023, over half of TSMC's revenue came from chips larger than 7 nanometers, but now its production of 3nm and 5nm chips has significantly increased, accounting for 28% and 35% of total shipments respectively, indicating the company's proactive adaptation to market demand for more efficient chips.
See More
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- Market Valuation Analysis: Despite Nvidia's significant growth expectations, its price-to-earnings ratio stands at only 24 times, slightly above the S&P 500's 22.2 times, indicating a cautious market sentiment regarding its future potential.
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See More
