Nvidia shares experienced a 1.9% decline in premarket trading on Tuesday, currently priced at $712.30. The market seems to be adopting a cautious stance as the chip maker prepares to release its upcoming earnings report.
Recent Developments
The stock closed at $726.13 on the previous Friday, just before the Presidents Day holiday. Nvidia is scheduled to report its January-quarter earnings after the market closes on Wednesday.
Analyst Insights
HSBC analyst Frank Lee recently raised the target price for Nvidia shares to $835, up from $800, while maintaining a Buy rating. Lee cautioned against expecting a significant earnings boost. He stated, “We believe overall market expectations have risen significantly as consensus earnings are now approaching our forecasts. Hence, we see limited room for further earnings upside.”
Future Prospects
Despite short-term uncertainties, Lee expressed confidence in Nvidia’s long-term growth potential, particularly in markets such as central processing units.
Industry Trends
Among other chip maker stocks, Advanced Micro Devices saw a 1.7% decrease in premarket trading, while Intel experienced a 3.3% increase. Reports emerged that the Biden administration is in discussions to provide over $10 billion in subsidies to Intel.
Market Performance
Nvidia shares have surged by 47% this year compared to a 4.9% increase in the S&P 500 index and a 5.1% gain in the Nasdaq Composite Index up to Friday’s close.