Citron Says NVIDIA Corporation (NVDA) Stock Belongs At $90, Does It Really?

Intel Set To Enter The AI Space In A Big Way

Probably the biggest threat to NVIDIA Corporation (NASDAQ:NVDA)’s rosy outlook is Intel Corporation (NASDAQ:INTC)’s counterattack in fast emerging markets like AI. While Intel has almost entirely dominated the data center processor market, it has ceded the AI space to Nvidia, whose graphics cards power a good chunk of deep learning neural networks. However, Intel is pushing back hard. Intel’s claim is that GPUs aren’t a sustainable solution to the computing requirements of deep learning. Intel claims, “The market is still nascent, so the current implementations are small enough that they could use GPUs, but it won’t scale in the future.” And to substantiate these claims, Intel Corporation (NASDAQ:INTC) has a partnership with Baidu to show for. It’s worth noting that Baidu has been a heavy user of Nvidia’s GPUs to power its deep learning models.

Much of Nvidia’s bullish narrative has been built around these emerging sectors. And if Intel or any other competitor for that matter can puncture that thesis, Nvidia won’t look as enticing anymore.

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Summing It Up

Whether NVDA stock belongs at $90 or not, some of Citron’s concerns are worth taking note of. The recent surge in NVDA stock has been fueled at large by an increasing number of bullish calls by popular analysts. And it appears as if investors might have ignored the potential risks. We still think Nvidia is a good long term investment, as we’ve highlighted in most of our recent posts. However, the upside might not be as significant as some of the recent louder-by-the-day bullish calls might have suggested. In fact, there are still 3 key risks that need to be highlighted, and we’ll look to do that in our upcoming post.

For now, NVIDIA Corporation (NASDAQ:NVDA) looks like it’s headed for further correction, and that theory is also supported by technicals like the Bollinger Bands, and the RSI. Long term investors could use these dips to accumulate shares of Nvidia. However, it might be prudent to temper down the expectations, at least a tad bit.

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