Nvidia (NVDA) Stock: Is the 14% Drop a Buying Opportunity?

TLDR

• Nvidia stock dropped 1.1% in Monday premarket trading, adding to a 14% monthly decline
• Broader market weakness pushed S&P 500 futures down 0.6%, dragging chip stocks lower
• Bernstein maintained its Outperform rating with a $275 price target following Nvidia’s investor memo
• AI capital spending projected to hit $423 billion in 2025 and $571 billion in 2026
• Multiple analysts raised price targets, with Citi projecting $57 billion in quarterly sales

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Nvidia shares fell 1.1% to $175.05 in premarket trading Monday morning. The move extends a difficult stretch for the AI chip leader.

NVIDIA Corporation, NVDA

Over the past month, the stock has dropped 14%. Monday’s decline came as part of a wider market selloff.

S&P 500 futures lost 0.6% in early trading. The weakness spread across the semiconductor sector.

Advanced Micro Devices fell 1.1% while Broadcom declined 0.8%. Both companies saw similar pressure in premarket activity.

Wall Street Stays Bullish

Despite recent losses, analysts remain confident in Nvidia’s prospects. Bernstein reaffirmed its Outperform rating on November 26 with a $275 price target.

The rating followed a memo Nvidia sent to Wall Street analysts. The document addressed investor concerns about receivables, working capital, and revenue flows.

Bernstein called the company’s explanations reasonable. The memo helped clear up questions that had been weighing on sentiment.

Client interest in the memo was high. Bernstein reported fielding multiple requests to review the details.

Citi raised its price target to $220 from $210 on November 10. The firm expects third-quarter sales of $57 billion, above the $55 billion consensus.

The investment bank sees continued strength ahead. Citi projects $62 billion in January quarter sales, beating Wall Street’s $61 billion estimate.

Bank of America also maintains a positive view. The firm highlights $500 billion in data center orders for 2025 and 2026.

Bank of America forecasts earnings per share of $8. That represents 50% sales growth and 70% EPS growth.

AI Spending Boom Continues

The broader AI market keeps expanding at a rapid pace. UBS analysts project global AI capital expenditure will reach $423 billion this year.

That figure is expected to climb to $571 billion in 2026. The growth provides room for multiple chip makers.

Broadcom’s work with Google on Tensor Processing Units has raised questions. Some investors wonder if TPUs could steal market share from Nvidia’s GPUs.

Google’s chips can offer better economics in certain scenarios. However, Nvidia’s software platform and GPU versatility remain key advantages.

Demand Signals Stay Strong

Nvidia has shipped 6 million Blackwell units according to recent disclosures. The figure points to healthy demand for its newest architecture.

The company disclosed it has $500 billion in data center orders lined up. Those orders span 2025 and 2026.

Citi expects the momentum to carry through the next several quarters. The firm’s sales projections consistently run above consensus estimates.

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