By Sam Boughedda
Investing.com — Nvidia Corporation (NASDAQ:NVDA) shares fell Friday after Wedbush downgraded the stock, although its price target went in the opposite direction — rising to $300 from $220.
Analyst Matt Bryson downgraded Nvidia shares to neutral from outperform, telling investors that the company's current valuation is the reason for the downgrade with its share price trading at 55 times his 2024 numbers.
"Conversely, we would have to roughly double our sales growth assumptions (from ~20% to ~40%) over the next couple of years if we were to continue to use a 40X multiple to value NVDA," Bryson told investors.
However, the analyst said that the "unprecedented demand" for data center and client offerings will see Nvidia exceed expectations when it reports earnings next week, while there is no "negative catalyst" for the stock, with the fundamentals improving.
"Conditions have only strengthened in recent months creating the potential our future estimates will work off of higher numbers," the analyst wrote. He said the stock's 50% gain from the last earnings period makes it hard to justify an outperform rating at this time.
Nvidia shares have slipped 1.8% to $298.30. In 2021, the stock has rallied over 132%.