TLDR Nvidia shares fell 17% from $212.19 peak to $175.02 as investors question AI spending returns and demand proof of sustainable growth Third-quarter revenue TLDR Nvidia shares fell 17% from $212.19 peak to $175.02 as investors question AI spending returns and demand proof of sustainable growth Third-quarter revenue

Nvidia (NVDA) Stock: Why This Pullback May Be The Perfect Buying Opportunity?

2025/12/15 20:43

TLDR

  • Nvidia shares fell 17% from $212.19 peak to $175.02 as investors question AI spending returns and demand proof of sustainable growth
  • Third-quarter revenue surged 62% to $57 billion with data center sales up 66% to $51.2 billion as Blackwell chips sold out
  • Stock trades at 43 times earnings with Q4 guidance of $65 billion revenue representing 65% year-over-year growth
  • Analysts maintain Strong Buy rating with $251 price target while technical indicators show neutral RSI at 48 with recent Buy signal
  • Competition from custom chips and China export restrictions present ongoing risks despite strong fundamentals

Nvidia stock has pulled back hard. Shares dropped from $212.19 in late October to $175.02, a 17% decline that has investors debating whether this represents a buying opportunity or a warning sign.


NVDA Stock Card
NVIDIA Corporation, NVDA

The selloff reflects changing sentiment around AI investments. Investors want concrete evidence that massive AI spending will deliver returns. They’re demanding proof this boom can sustain itself long-term.

But Nvidia’s latest quarterly results tell a different story. Revenue hit $57 billion in fiscal Q3, up 62% year-over-year. That’s actually faster than the 56% growth rate from Q2, marking a return to accelerating growth.

Data center revenue climbed 66% to $51.2 billion. Operating income rose 65% to $36 billion. Earnings per share jumped 67% to $1.30. The company is maintaining profitability while scaling rapidly.

Strong Q4 Outlook Defies Slowdown Concerns

Management guided for Q4 revenue of $65 billion, implying 65% year-over-year growth and 14% sequential gains. These projections don’t suggest a company facing an AI bubble burst.

The stock now trades at 43 times earnings. That valuation assumes continued rapid growth and gross margins staying in the 70% range. Any deviation could trigger further declines.

Semiconductor markets have historically been cyclical. Even with AI driving demand, a pause in buildout spending could hurt shares more than current prices reflect.

Competition and Geopolitical Risks Loom

Tech giants are developing their own chips. Alphabet and Amazon are building alternatives to Nvidia’s GPUs. Successful alternatives could quickly shift investor sentiment.

China export restrictions add uncertainty. Nvidia has grown despite limited China exposure, but regulatory constraints create long-term planning challenges and reduce addressable market potential.

The technical picture is improving though. A Buy signal triggered on December 4. The stock is stabilizing above key moving averages with firming volume suggesting institutional buying rather than speculative trading.

The 14-day RSI sits at neutral 48, indicating room for movement in either direction without overbought conditions that typically precede pullbacks.

Analyst Outlook Remains Bullish

Wall Street maintains a Strong Buy consensus rating. The average 12-month price target of $251 implies nearly 50% upside from current levels.

Analyst confidence stems from Nvidia’s product pipeline. Hopper and Blackwell architectures are winning market share. The upcoming Rubin platform provides multi-year revenue visibility and reinforces competitive advantages.

Hyperscalers and enterprises continue heavy investment in Nvidia’s platforms. AI computing demand remains robust despite valuation concerns pressuring the stock price.

Reaching $200 by year-end is plausible but not guaranteed. Strong fundamentals support upside potential. However, valuation sensitivity and geopolitical risks could limit gains or cause additional volatility.

The $200 level represents psychological resistance requiring strong volume and positive catalysts to break through convincingly.

Current neutral momentum indicators suggest the stock isn’t overheated. If buying pressure builds, technical conditions support further appreciation without hitting overbought extremes that trigger profit-taking.

The fundamentals haven’t deteriorated despite the price drop. Third-quarter results showed accelerating growth across key metrics. Q4 guidance projects continued strength. The question is whether the valuation properly balances growth potential against execution and market risks.

The post Nvidia (NVDA) Stock: Why This Pullback May Be The Perfect Buying Opportunity? appeared first on Blockonomi.

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