Nvidia’s Stock (NVDA) In Correction Territory – An Early Festive Gift?

Nvidia's stock (NASDAQ: NVDA) has pulled back markedly in recent days, retracing to levels not seen in 2 months, after what has been another mammoth year. The leading name in the AI semiconductor market, has experienced significant volatility in its stock performance this year, although mostly to the upside.

Despite a strong upward trend earlier in the year that has driven NVDA to 170% in gains on a year-to-date basis, Nvidia's shares have now pulled back more than 10% in the past two weeks. Into correction territory, there are many wondering whether this is an early Christmas gift, or whether there is more downside to come?

The $130 level seems to be holding firm, despite an earlier drop in early trading to $126.86, Nvidia's share price is now down 1.13% on the day at $130.51. Looking at the chart above, there is a lot of magnetism around $130, and this could prove to be a pivotal level in charting the next leg for NVDA.

Operationally, Nvidia's strategic plans have encountered obstacles, most notably with its highly anticipated Blackwell GPU. Originally scheduled for launch in the fourth quarter of this year, the full production and revenue will not be seen until early next year, roughly 3 months after originally intended.

Broadcom's recent earnings, and transparency over outlook until FY 27 has also coincided with the pullback in Nvidia, yet analysts remain firmly bullish.

From a financial metrics perspective, Nvidia's price-earnings ratio stands at 51.47, indicating a high valuation compared to the market average, but one which in recent times has been very well earned.

Truist have recently raised their price target to $204 from a $169, retaining their Buy rating. Whilst the firm remain cautious on AI and semiconductors in general as sectors, they expect 2025 to be another dominant year for the company's full technology stack. An additional $35B total addressable market is expected to open up with a client-side CPU launch.

The consensus mark on the street of $172.38 reflects a potential upside of more than 20% from current price action, with the low mark of $130 close.

While Nvidia remains a critical leader in the semiconductor industry, the current market conditions reflect investor caution, possibly due to strategic shifts and product launch delays. The coming days could prove to be critical as Nvidia navigates these challenges, and its ability to stabilize and further grow will be closely watched by market participants.

The next catalyst could be just around the corner, and shopping here on a discount could prove to be a good move long-term. As usual, ensure you conduct your own due diligence and risk management before taking any position.