Nvidia Buy Sell or Hold: A Comprehensive Guide to Buying, Selling, or Holding

If you're considering buying, selling, or holding onto Nvidia stock, it's essential to understand the company's performance and growth prospects. Nvidia's revenue has consistently increased over the years, with a compound annual growth rate (CAGR) of 24.5% from 2016 to 2020.

Nvidia's strong financials and innovative products have made it a leader in the technology industry. The company's graphics processing units (GPUs) and high-performance computing (HPC) solutions are in high demand, driving growth and profitability.

Investors should also consider Nvidia's expanding presence in emerging markets, such as artificial intelligence (AI) and autonomous vehicles. With a strong track record of innovation and growth, Nvidia is well-positioned to capitalize on these trends.

Nvidia's strong earnings growth is a major factor in its stock market performance. The company's Earnings Per Share Rating is a perfect 99, and its Composite Rating is 98, indicating all-around strength.

Nvidia's revenue and earnings growth estimates through 2026 are significantly higher than the S&P 500's, with analysts expecting a compound annual growth rate of 35.5% in sales and 35.1% in earnings per share. This is a remarkable contrast to the S&P 500's estimated 5.7% sales growth and 13.8% earnings per share growth over two years.

According to analyst recommendations, 90 out of 130 analysts have suggested buying Nvidia stock, while 25 have recommended selling it.

Nvidia is a market leader in the AI chip industry, with an ideal Earnings Per Share Rating of 99 and a Composite Rating of 98, indicating all-around strength.

Its stock is on the IBD Leaderboard, a model portfolio that tracks top-performing stocks. The Leaderboard also includes a hedge on Nvidia's position with the Granite 2x Short NVDA Daily (NVD) exchange-traded fund.

Analysts expect Nvidia to have a compound annual growth rate of 35.5% in sales and 35.1% in earnings per share over the next two years, significantly outpacing the S&P 500's expected growth rate of 5.7% in sales and 13.8% in earnings per share.

Nvidia's strong growth prospects have earned it a spot as the top-ranked S&P 500 company for revenue and earnings growth estimates through 2026.

Here are the key statistics that demonstrate Nvidia's market leadership:

Nvidia's impressive growth prospects have made it a top AI stock to watch, with 90 out of 130 stock analysts recommending a buy in the last year.

Taiwan Semiconductor's sales grew 34% annually in November, but declined 12.2% from October.

Shares of Nvidia fell 2.7% due to the news, and also dropped 2.6% on December 9 amid reports of an antitrust investigation in China.

Nvidia is in talks with Taiwan Semiconductor to start production of its Blackwell chip in Arizona, a move that could help the company avoid tariff risks from the Trump administration.

Earlier plans were to use the Arizona factory for less-advanced chips, but the new plan could be a game-changer for Nvidia's production.

Melius Research analysts raised their price target for Nvidia to 185 from 165 and maintained their buy rating.

However, earlier, shares came under pressure after President-elect Donald Trump said he plans big tariffs on goods from China, Mexico, and Canada.

Raw semiconductor imports from these countries are tiny and would not hurt Nvidia, according to Bernstein Research analyst Stacy Rasgon.

The tariff raises some concerns that there may be more broad-based action that could hurt the semiconductor industry, including leaders like Nvidia.

Mizuho analyst Jordan Klein noted that the "restrictions seem in line or less severe than anticipated."

Relative Valuation is a crucial aspect of understanding Nvidia's market performance. Nvidia's forward P/E ratio is approximately 50x, which is significantly higher than the industry average of 25x.

This premium reflects Nvidia's AI-driven growth potential, but it may also indicate limited upside unless growth exceeds expectations. The market is valuing Nvidia's future prospects at a high price, which could be a concern for investors.

To put this into perspective, a forward P/E ratio of 50x means that investors are expecting a high return on their investment in Nvidia. However, this also means that the company's stock price may be overvalued if its growth doesn't meet expectations.

Slowing momentum is a clear indication in the market, and it's happening in Nvidia's stock. The stock broke out above a symmetrical triangle last month, but since then, trading volumes have continued to decrease.

This lack of buying participation from larger market participants is a red flag. It means that even though the stock is making new highs, there isn't enough support from the big players.

The relative strength index (RSI) is also showing a bearish divergence, with shallower peaks forming since March. This is a chart signal that points to slowing buying momentum, and it's something to keep an eye on.

Dropping stock prices can be a concern for investors. Earnings reports or recent company news can cause the stock price to drop.

Recent company news can significantly impact a stock's price. A negative announcement can lead to a sudden drop in stock value.

Investors often rely on expert advice to make informed decisions. Stock experts' recommendations can help you decide if you should buy, sell, or hold the stock.

Understanding the reasons behind a stock's drop is crucial for making smart investment decisions. By staying informed and seeking expert advice, you can navigate the market with confidence.

Broadcom is a strong competitor to Nvidia in the data center AI networking gear market, with two large customers developing their own next-generation AI processors using Broadcom's chips.

Broadcom is also designing an AI chip for Apple, which could further erode Nvidia's market share.

Microsoft, a key customer and leader of the "Magnificent Seven", is not "chip supply constrained", which could be a vulnerability for Nvidia.

Nvidia's main advantage over ASICs is its ability to handle different workloads, thanks to its CUDA software and high bandwidth memory.

Nvidia's CoWoS foundry capacity allocation is expected to grow to 60% in 2025, indicating continued momentum for the company's GPUs.

Taiwan Semiconductor, Nvidia's supplier, specializes in CoWoS packaging technology, which Nvidia purchases in large quantities.