2024-07-17 09:18:24 ET
Summary
- Nvidia's fundamental growth, driven by AI and data center demand, will likely slow in 2026 due to market saturation, including the completion of initial AI build-outs and double-ordering by customers.
- A potential price correction is likely in H2 2025 or H1 2026; competition and tech advancements may impact NVDA's long-term dominance.
- High valuation compared to peers; current Hold rating with potential Strong Buy opportunity in 2026-2027 as undervaluation emerges, opening up high long-term growth potential in robotics and automation.
I've covered Nvidia ( NVDA ) twice before, and in my first analysis of the company, I was skeptical about the valuation—albeit, at that time, I arguably should have been bullish. In April 2024 , I provided follow-up coverage, and I rated the stock a Buy. Since then, the investment has gained ~60% in price. Now, I think the investment is certainly overvalued in the near term, and I think there is some potential for the stock to contract significantly in price in late fiscal 2025/early fiscal 2026. It is important for investors to begin to ascertain how the market is going to react once the company begins to report slower YoY growth, which Wall Street analysts have forecasted is likely to truly begin in 2026. It is somewhat speculative to ascertain whether the market will sustain the high valuation, but my own perspective is that NVDA is in for somewhat of a correction, and I think this could be relatively steep and could begin somewhere in H2 2025....
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Nvidia: Prepare For A Correction In H2 2025 Or H1 2026