Nvidia (NVDA) Stock: Why Wall Street Still Sees $275 Target Despite Market Weakness

TLDR

• Nvidia stock fell 1.1% in premarket trading on Monday, extending a 14% decline over the past month
• The drop mirrors a broader market slump, with S&P 500 futures down 0.6%
• Bernstein reaffirmed its Outperform rating with a $275 price target after Nvidia issued a memo addressing investor concerns
• Global AI capital expenditure is expected to reach $423 billion in 2025 and $571 billion in 2026
• Citi raised its price target to $220, expecting Nvidia to deliver $57 billion in Q3 sales above consensus estimates

Nvidia shares dipped 1.1% to $175.05 in premarket trading on Monday. The decline adds to a rough month for the chip maker, which has lost 14% over the past 30 days.

NVIDIA Corporation, NVDA

The latest drop comes as part of a broader market pullback. S&P 500 futures were down 0.6% in early trading.

Other chip makers also felt the pressure. Advanced Micro Devices slipped 1.1% while Broadcom lost 0.8% in premarket trading.

The weakness comes despite recent positive analyst commentary. On November 26, Bernstein reaffirmed its Outperform rating on Nvidia with a $275 price target.

The rating came after Nvidia circulated a memo to sell-side analysts. The document addressed several concerns that had been weighing on investor sentiment.

The memo tackled questions about receivables, working capital, depreciation, and revenue flows. Bernstein said the company’s explanations were reasonable and helped clear up uncertainty.

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The memo drew heavy interest from clients. Bernstein reported multiple requests to review the details after it was distributed.

Analyst Outlook Remains Strong

Citi analysts raised their price target to $220 from $210 on November 10. The firm expects Nvidia to deliver $57 billion in sales for its October quarter, beating consensus estimates of $55 billion.

The investment bank also projects momentum will continue. Citi forecasts $62 billion in sales for the January quarter, above Wall Street’s $61 billion estimate.

Bank of America remains bullish on the stock as well. The firm points to $500 billion in data center orders for 2025 and 2026.

Bank of America expects earnings per share to hit $8, representing 50% sales growth and 70% EPS growth.

Competition Concerns Persist

Broadcom’s partnership with Google on Tensor Processing Units has sparked debate. Some market watchers question whether TPUs could take market share from Nvidia’s GPUs.

Google’s TPUs can offer better cost structures under certain conditions. But Nvidia’s software ecosystem and the versatile nature of its GPUs provide strong advantages.

UBS analysts note the AI hardware market is expanding rapidly. Global AI capital expenditure is projected to reach $423 billion this year and $571 billion in 2026.

“With AI increasingly integrated into existing applications and workloads, we believe future productivity improvements and monetization opportunities will be sufficient to justify ongoing AI investments,” wrote Mark Haefele, chief investment officer at UBS Global Wealth Management.

The rapid market growth suggests room for multiple chip types. Nvidia disclosed that it has shipped 6 million Blackwell units, indicating strong demand for its latest products.