- Nvidia has lost close to half of its market value this year despite consistently strong fundamental showings buoyed by a bullish chip demand environment.
- The semiconductor peer group has been punished by a broad-based multiple compression this year as a result of tightening monetary policies that threaten to erode their lofty valuation prospects.
- Rising investors' concerns of a slowing cycle after three years of rapid gains in the semiconductor industry, especially given the potential consumption slowdown, have also weighed on the Nvidia stock.
- But the anticipated continuation of Nvidia's fundamental outperformance sustained by its technological prowess in graphics and AI processors and software, as well as new developments in data center CPUs, are expected to put investors' focus back on its strong fundamentals.
- We remain confident that Nvidia's fundamental strength will prevail as the primary driver of its valuation upsides ahead once the near-term macro headwinds fade.
For further details see:
Why Has Nvidia Stock's Price Dropped In April And What's The Outlook?