NVIDIA (NASDAQ:NVDA) Stock Falls 1.3% – Here’s Why

NVIDIA Corporation (NASDAQ:NVDA) was down 1.3% during mid-day trading on Monday. The stock traded as low as $224.90 and last traded at $226.32. 69,699,607 shares were traded during mid-day trading, a decline of 54% from the average daily volume of 152,120,516 shares. The stock had previously closed at $229.28.

Key Stories Impacting NVIDIA

Here are the key news stories impacting NVIDIA this week:

• Positive Sentiment: Networking expansion strengthens NVIDIA’s AI platform. NVIDIA and Cisco announced USFP optical modules supporting 400Gb/s-per-lane signals and up to 12.8Tb/s of capacity. The technology could help data centers scale AI systems with greater bandwidth density and power efficiency, extending NVIDIA’s reach beyond GPUs. NVIDIA and Cisco Announce USFP
• Positive Sentiment: Reflection AI talks could broaden NVIDIA’s strategic position. NVIDIA is reportedly considering a larger investment in, or acquisition of, open-weight model developer Reflection AI. The discussions are preliminary, but such a deal could support demand for NVIDIA’s compute and strengthen its role in the AI software ecosystem. Nvidia Negotiates Investment or Acquisition of Reflection AI
• Positive Sentiment: Enterprise demand and analyst enthusiasm remain supportive. Hewlett Packard Enterprise’s NVIDIA partnership is aimed at expanding enterprise AI offerings, while recent coverage points to triple-digit revenue growth, strong data-center demand and price targets well above the current trading level. HPE Partners With NVDA
• Neutral Sentiment: Upcoming industry results may set the next direction. Investors are watching Taiwan Semiconductor’s results as an early indicator of advanced-chip and high-performance-computing demand ahead of NVIDIA’s next earnings report. TSMC Reports Oct. 15
• Negative Sentiment: Microsoft’s custom-chip push is the main immediate headwind. Microsoft said it plans to make its Maia chips a primary architecture for running AI models and eventually deploy multiple gigawatts of them. Greater use of in-house silicon could reduce Microsoft’s dependence on NVIDIA GPUs and raise concerns about hyperscaler customer concentration. Microsoft to Rely More on Homegrown AI Chips
• Negative Sentiment: Valuation and AI-bubble concerns are limiting upside. Investors including Steve Eisman and Ray Dalio warned that market exposure to AI has become unusually concentrated. A reported $21 million options position betting NVDA below $180 by January adds to near-term caution, although it is not proof of a fundamental deterioration. Steve Eisman Warns S&P 500 Is One Giant AI Bet
• Negative Sentiment: Insider selling may reinforce investor caution. Reported NVIDIA insider activity over the past six months shows sales without purchases, including substantial selling by director Mark Stevens and other executives. Such transactions may reflect diversification, but they can weigh on sentiment at a record valuation.

Analyst Ratings Changes

NVDA has been the topic of several research reports. Evercore set a $465.00 price objective on shares of NVIDIA and gave the stock an “outperform” rating in a report on Thursday, August 27th. Royal Bank Of Canada lifted their price objective on shares of NVIDIA from $300.00 to $330.00 and gave the company an “outperform” rating in a report on Thursday, August 27th. Sanford C. Bernstein restated a “buy” rating on shares of NVIDIA in a report on Monday, September 21st. Weiss Ratings reaffirmed a “buy (b)” rating on shares of NVIDIA in a research report on Friday, October 2nd. Finally, BNP Paribas Exane reaffirmed an “outperform” rating and issued a $345.00 price target on shares of NVIDIA in a research report on Monday, October 5th. Five equities research analysts have rated the stock with a Strong Buy rating, forty-nine have assigned a Buy rating and one has given a Hold rating to the company’s stock. According to data from MarketBeat.com, the company has a consensus rating of “Buy” and a consensus price target of $321.89.

NVIDIA Price Performance

The business has a 50 day moving average price of $222.66 and a two-hundred day moving average price of $209.66. The stock has a market cap of $5.45 trillion, a PE ratio of 28.61, a P/E/G ratio of 1.77 and a beta of 2.22. The company has a debt-to-equity ratio of 0.14, a quick ratio of 3.85 and a current ratio of 4.59.

NVIDIA (NASDAQ:NVDA) last released its earnings results on Wednesday, August 26th. The computer hardware maker reported $2.22 earnings per share (EPS) for the quarter, beating the consensus estimate of $2.09 by $0.13. NVIDIA had a return on equity of 96.04% and a net margin of 63.66%. The company had revenue of $96.22 billion during the quarter, compared to analyst estimates of $92.27 billion. During the same period in the prior year, the company posted $1.05 earnings per share. NVIDIA’s quarterly revenue was up 105.9% on a year-over-year basis. Research analysts expect that NVIDIA Corporation will post 9.25 earnings per share for the current fiscal year.

NVIDIA Announces Dividend

The business also recently declared a quarterly dividend, which was paid on Thursday, October 1st. Stockholders of record on Thursday, September 10th were given a dividend of $0.25 per share. The ex-dividend date was Thursday, September 10th. This represents a $1.00 annualized dividend and a dividend yield of 0.4%. NVIDIA’s dividend payout ratio is currently 12.64%.

NVIDIA announced that its board has initiated a stock buyback program on Monday, September 28th that permits the company to buy back $150.00 billion in shares. This repurchase authorization permits the computer hardware maker to purchase up to 2.8% of its stock through open market purchases. Stock repurchase programs are usually an indication that the company’s board believes its shares are undervalued.

Insiders Place Their Bets

In other news, EVP Timothy S. Teter sold 30,460 shares of the stock in a transaction dated Monday, September 21st. The stock was sold at an average price of $222.80, for a total transaction of $6,786,488.00. Following the transaction, the executive vice president directly owned 2,687,660 shares in the company, valued at approximately $598,810,648. This represents a 1.12% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Colette Kress sold 34,918 shares of the stock in a transaction that occurred on Thursday, September 17th. The shares were sold at an average price of $219.05, for a total transaction of $7,648,787.90. Following the transaction, the chief financial officer owned 765,103 shares in the company, valued at $167,595,812.15. The trade was a 4.36% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 1,766,118 shares of company stock worth $399,450,353 in the last ninety days. 3.94% of the stock is currently owned by insiders.

Hedge Funds Weigh In On NVIDIA

Hedge funds and other institutional investors have recently modified their holdings of the company. Integrated Financial Solutions Inc. boosted its holdings in shares of NVIDIA by 0.7% during the 3rd quarter. Integrated Financial Solutions Inc. now owns 175,705 shares of the computer hardware maker’s stock valued at $40,127,000 after acquiring an additional 1,301 shares during the last quarter. Sacks & Associates LLC purchased a new stake in NVIDIA in the 3rd quarter worth approximately $3,328,000. Adirondack Capital Advisors LLC boosted its holdings in NVIDIA by 15.9% in the 3rd quarter. Adirondack Capital Advisors LLC now owns 2,152 shares of the computer hardware maker’s stock worth $491,000 after buying an additional 295 shares during the period. Roan Capital Partners raised its stake in NVIDIA by 22.7% during the 3rd quarter. Roan Capital Partners now owns 1,378 shares of the computer hardware maker’s stock valued at $315,000 after purchasing an additional 255 shares during the period. Finally, Armstrong Advisory Group Inc. raised its position in shares of NVIDIA by 2.3% during the third quarter. Armstrong Advisory Group Inc. now owns 29,984 shares of the computer hardware maker’s stock valued at $6,848,000 after buying an additional 663 shares during the last quarter. 65.27% of the stock is owned by institutional investors.

About NVIDIA

NVIDIA Corporation is a technology company that designs accelerated computing platforms, graphics processing units (GPUs), central processing units (CPUs), networking products and related software. Its technologies are used in artificial intelligence, data centers, scientific and technical computing, gaming, professional visualization, automotive systems and robotics.

The company’s products include GeForce GPUs and gaming software, data center computing platforms, networking solutions, and enterprise software for AI development and deployment.