Nvidia Stock Drops Again. It Can’t Save the Market, but It Could Be a Buy.

Nvidia is the favored provider of artificial-intelligence chips. (Courtesy NVIDIA)

Key Points

• Nvidia shares fell 1.8% in premarket trading and 3.2% after its earnings report, continuing a selloff.
• Wall Street analysts increased their average target price for Nvidia to $250 from $234 following the earnings.
• An analyst noted Nvidia’s A100 chips, shipped six years ago, are still 100% utilized, indicating no AI bubble yet.

Nvidia stock was dropping early Friday, continuing the previous day’s selloff following the chip maker’s earnings report. The results weren’t able to keep the market from falling, but Wall Street analysts are backing it to eventually turn around, despite fears of an artificial-intelligence bubble.

Nvidia shares were down 1.8% at $177.30 in premarket trading. The stock fell 3.2% after its earnings, changing sharply after initial gains. Futures tied to the S&P 500 index were up 0.2%.

Among other chip makers, Advanced Micro Devices was falling 0.8% and Broadcom was down 0.4% in premarket trading.

Despite the selloff, Wall Street is even more positive on Nvidia than it was before the earnings. The average target price on the stock now stands at $250, according to FactSet—up from around $234 before the results announcement.

As Barron’s has noted, Nvidia’s accelerating revenue and comments on the usable life of its chips suggested the AI spending cycle has some way to go even as the market frets about shrinking cash flows and increasing debt loads at its customers.

“We see the telltale sign of a bubble as gear that has been ordered or shipped for which there is no operational or economic value,” wrote Truist Securities analyst William Stein in a research note. “On its conference call, Nvidia noted that its A100 chips, which began shipping six years ago, are all still in the field and are running at 100% utilization. We believe this is the clearest indication that we are not in a bubble…at least not yet.”

Stein raised his price target to $255 from $228 and kept a Buy rating on the stock.

Separately, Taiwan’s Foxconn said Friday that a $1.4 billion supercomputing center it is building with Nvidia will come online in the first half of 2026. The company, known formally as Hon Hai Precision Industry , said the facility will be powered by Nvidia GB300 NVL72 systems.

Write to Adam Clark at adam.clark@barrons.com