Nvidia (NVDA) will widen its commanding lead in the artificial intelligence market. The firm expects to mass-produce the GB200 HPC and AI servers in the next year. Peak shipments will occur during the second and third quarter timeframe.
Since the stock market is a forward-pricing mechanism, expect NVDA stock to start its rebound in the coming months. However, near-term uncertainties will limit Nvidia’s performance. Traders are speculating that the more complicated GB200 design would delay its shipment. In addition, component shortages might push back the peak production target timeline.
Fortunately, Nvidia does not face any real competition in offering the most advanced AI solutions. AMD’s MI 300 series servers are not as fast. Similarly, Intel (INTC) Gaudi AI servers target the budget market. This would give Nvidia a wide lead, expanding its profit margins for the next several quarters.
Nvidia Stock Downtrend Explained
Nvidia’s uptrend rally in November stalled at around $150. When it failed to break out, the downtrend followed. Shares broke below the 50-day simple moving average at $140, closing at $134.70. The price-to-earnings ratio is 53 times, compared to 30.4 times forward P/E.
Nvidia’s forward multiples will fall when it beats expectations. Hold NVDA stock at current prices. Add to the core position if the stock falls below $120.00.