Nvidia shares fell 5% today, following a 15% surge in yesterday’s trading. Analysts at Morgan Stanley issued a new report on the company, saying “This is not over” regarding tariff uncertainty. Despite strong near-term demand, macro risks remain due to ongoing tariffs and challenges they impose.
Morgan Stanley remains overweight on Nvidia, with a $162 price target, but notes that Trump’s 25% tariff on steel and automobiles still applies, as well as 124% tariffs on China. New data showing eased inflation in March has not calmed investors, who remain concerned about the potential impact of tariffs on the economy.
The stock trades around 25 times forward earnings, below its five-year average. While there are near-term risks, the risk-reward proposition looks better for long-term holders. With much uncertainty remaining, Nvidia will focus on capital expenditures in artificial intelligence to stay robust.
Before investing $1,000 in Nvidia, consider that The Motley Fool’s Stock Advisor team did not include it on their list of top 10 stocks to buy now. However, joining Stock Advisor could provide access to the latest top 10 list and an average return of 820% compared to the S&P 500’s 158%.
Source: https://finance.yahoo.com/news/why-shares-nvidia-sinking-today-144523146.html