TLDR
- Nvidia shares declined 1.1% to $175.05 in Monday’s premarket session, continuing a 14% monthly retreat
- Market-wide weakness hit chip stocks as S&P 500 futures dropped 0.6% in early trading
- Analysts at Bernstein kept their $275 price target after Nvidia released a memo addressing investor concerns
- UBS projects AI capital expenditure will grow from $423 billion in 2025 to $571 billion in 2026
- Citi expects Nvidia to report $57 billion in quarterly revenue, exceeding Wall Street estimates by $2 billion
Nvidia opened Monday morning in the red. Shares fell 1.1% to $175.05 before the market bell.
The premarket drop continues a rough patch for the chip maker. The stock has shed 14% over the past 30 days.
Monday’s decline matched broader market trends. S&P 500 futures were down 0.6% in early trading.
Other semiconductor names faced similar headwinds. Advanced Micro Devices lost 1.1% while Broadcom dropped 0.8%.
The sector-wide pressure comes despite strong fundamentals. Wall Street analysts continue backing Nvidia with high price targets.
Strong Analyst Support Holds
Bernstein maintained its Outperform rating on November 26. The firm kept its $275 price target unchanged.
The rating came after Nvidia distributed a memo to analysts. The document tackled concerns about receivables, working capital, and depreciation.
Bernstein described the company’s responses as reasonable. The memo addressed uncertainty that had been building among investors.
Interest in the document was intense. Bernstein said it received numerous requests from clients wanting to review the memo’s contents.
Citi boosted its price target to $220 from $210 earlier in November. The firm projects Nvidia will post $57 billion in third-quarter revenue.
That figure sits $2 billion above the Street’s $55 billion consensus. Citi sees the beat continuing into the next quarter.
The investment bank forecasts $62 billion for the January period. Wall Street currently expects $61 billion.
AI Market Expansion Powers Growth
Bank of America points to massive order books as a bullish sign. The firm notes Nvidia has secured $500 billion in data center orders through 2026.
Bank of America predicts earnings per share will hit $8. That would represent 50% revenue growth and 70% EPS expansion.
The AI infrastructure market keeps growing. UBS analysts estimate global AI capital spending will reach $423 billion this year.
Next year’s forecast jumps to $571 billion. The expansion creates space for multiple players to succeed.
Competition from Google’s Tensor Processing Units has sparked debate. TPUs can deliver better cost economics in specific use cases.
But Nvidia maintains advantages through its software ecosystem. The versatility of its GPUs also helps defend market position.
Mark Haefele, chief investment officer at UBS Global Wealth Management, sees sustained investment levels. He believes productivity gains and monetization will justify continued AI spending.
Nvidia has already shipped 6 million Blackwell units. The strong shipment numbers signal healthy demand for its latest chip architecture.
The company’s order book extends well into 2026. Data center customers have committed to $500 billion in purchases over the next two years.
Citi remains optimistic about near-term performance. The firm’s revenue estimates consistently run ahead of consensus forecasts for multiple quarters.
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