NVIDIA (NASDAQ:NVDA) Shares Down 1.3% – Here’s Why

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

Trending Headlines about 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.

Wall Street Analyst Weigh In

A number of equities analysts have weighed in on the stock. Wall Street Zen raised shares of NVIDIA from a “buy” rating to a “strong-buy” rating in a research note on Saturday. The Goldman Sachs Group reiterated a “buy” rating on shares of NVIDIA in a report on Thursday, September 10th. Sanford C. Bernstein reissued a “buy” rating on shares of NVIDIA in a research note on Monday, September 21st. KGI Securities upped their price objective on NVIDIA from $335.00 to $345.00 in a report on Thursday, August 27th. Finally, Phillip Securities upped their price objective on NVIDIA from $285.00 to $300.00 and gave the stock a “buy” rating in a report on Monday, August 31st. Five analysts have rated the stock with a Strong Buy rating, forty-nine have assigned a Buy rating and one has assigned a Hold rating to the company. According to data from MarketBeat, the company has a consensus rating of “Buy” and a consensus price target of $321.89.

NVIDIA Price Performance

The company has a 50-day moving average price of $222.66 and a two-hundred day moving average price of $209.66. The company has a debt-to-equity ratio of 0.14, a current ratio of 4.59 and a quick ratio of 3.85. The company 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.

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

NVIDIA Dividend Announcement

The company also recently disclosed a quarterly dividend, which was paid on Thursday, October 1st. Shareholders of record on Thursday, September 10th were given a $0.25 dividend. The ex-dividend date of this dividend was Thursday, September 10th. This represents a $1.00 annualized dividend and a yield of 0.4%. NVIDIA’s dividend payout ratio (DPR) is 12.64%.

NVIDIA announced that its Board of Directors has initiated a stock buyback plan on Monday, September 28th that permits the company to repurchase $150.00 billion in outstanding shares. This repurchase authorization permits the computer hardware maker to repurchase up to 2.8% of its shares through open market purchases. Share repurchase plans are typically a sign that the company’s board of directors believes its shares are undervalued.

Insider Activity

In other news, EVP Timothy S. Teter sold 30,460 shares of the company’s stock in a transaction on Monday, September 21st. The shares were sold at an average price of $222.80, for a total value of $6,786,488.00. Following the completion of 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 ownership of the stock. 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, Director Mark A. Stevens sold 622,239 shares of the firm’s stock in a transaction on Friday, September 4th. The shares were sold at an average price of $231.62, for a total transaction of $144,122,997.18. Following the sale, the director directly owned 2,336,531 shares of the company’s stock, valued at approximately $541,187,310.22. The trade was a 21.03% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold 1,766,118 shares of company stock worth $399,450,353 over the last 90 days. Company insiders own 3.94% of the company’s stock.

Institutional Investors Weigh In On NVIDIA

Hedge funds and other institutional investors have recently added to or reduced their stakes in the company. State Street Corp lifted its position in shares of NVIDIA by 1.6% during the 2nd quarter. State Street Corp now owns 1,009,783,437 shares of the computer hardware maker’s stock valued at $202,047,568,000 after acquiring an additional 15,897,836 shares during the period. Bank of America Corp DE grew its holdings in NVIDIA by 2.2% in the second quarter. Bank of America Corp DE now owns 195,366,864 shares of the computer hardware maker’s stock worth $39,090,956,000 after purchasing an additional 4,165,875 shares during the period. Invesco Ltd. grew its holdings in NVIDIA by 0.3% in the fourth quarter. Invesco Ltd. now owns 143,239,504 shares of the computer hardware maker’s stock worth $26,714,167,000 after purchasing an additional 446,178 shares during the period. J. Stern & Co. LLP raised its holdings in shares of NVIDIA by 13,709.1% during the fourth quarter. J. Stern & Co. LLP now owns 125,760,307 shares of the computer hardware maker’s stock valued at $23,454,297,000 after purchasing an additional 124,849,603 shares during the period. Finally, Amundi boosted its position in shares of NVIDIA by 10.4% during the 1st quarter. Amundi now owns 133,768,018 shares of the computer hardware maker’s stock worth $23,329,141,000 after purchasing an additional 12,575,177 shares in the last quarter. Hedge funds and other institutional investors own 65.27% of the company’s stock.

NVIDIA Company Profile

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.