3. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holdings: 102
Share Price (as of August 15): $190.32
YTD Declines (as of August 15): 37.22%
Headquartered in Santa Clara, California, NVIDIA Corp. (NASDAQ:NVDA) is an American multinational technology company which specializes in the design of graphic processing units, application programming interface, and SoCs for the mobile computing and automotive market. As of the second quarter of 2022, Value Star Asset Management is the largest shareholder in the stock, with a total stake value of $6.7 billion.
Like many technology stocks, NVIDIA’s (NASDAQ:NVDA) share price took a massive hit in 2022. As of August 9, the company is back down to a $430 billion market cap, and down almost 50% from its 52-week highs, as NVIDIA Corp. (NASDAQ:NVDA) announced extremely weak preliminary earnings. Operating expenses have remained roughly constant, which will likely lead to profits being minimal. Moreover, NVIDIA Corp. (NASDAQ:NVDA) had a horrible second quarter in 2022, with incredibly low revenues due to declining gaming GPU revenues.
However, analysts expect this slump to be a transitory period for the company, owing to the strength of a 4xxx GPU launch and multiple other opportunities. Of the 43 Wall Street analysts who reviewed NVIDIA Corp. (NASDAQ:NVDA) since May 2022, 25 have given it a rating of Strong Buy and 8 have maintained a Buy rating on the stock. Truist analyst William Stein lowered the firm’s price target on NVIDIA Corp. (NASDAQ:NVDA) to $216 from $283, maintaining a Buy rating on the stock. The analyst warns that the weakness in demand for gaming may persist into Q3 before picking up in the January-April 2023 timeframe. Stein further explained that the underperformance of the Data Center and AI segments have more to do with supply chain issues, as he sees demand remaining constructive.
ClearBridge Investments mentioned NVIDIA Corp. (NASDAQ:NVDA) in their Q2 2022 investor letter. This is what they had to say:
“Chipmaker Nvidia (NASDAQ:NVDA) has also been pressured by multiple compression of higher growth companies and weakness in its gaming business. While Nvidia has grown into a top 10 position with its strong performance through late 2021, we have been consistently trimming the position to derisk against short-term volatility in its gaming business. The company is clearly exposed to the semiconductor cycle but also participates in the secular growth of cloud and AI adoption through its data center business. With these secular drivers intact and new products ramping up in the second half of the year, we are maintaining an overweight to the company.”
