Sam Boughedda

Investing.com — Nvidia Corporation (NASDAQ:) shares fell Friday after Wedbush downgraded the stock, although its price target went in the opposite direction — rising to $300 from $220.

Nvidia share prices were downgraded by analyst Matt Bryson to neutral from underperform. He told investors that Nvidia’s current valuation was the cause of the decline, with the shares trading at 55x his 2024 numbers. 

Bryson explained to investors, “Conversely we would need to roughly double the sales growth assumptions [from 20% up to 40%) in the next few years if our 40X multiple was to value NVDA].”

Analysts stated however that Nvidia will report earnings exceeding expectations due to “unprecedented customer demand” and Nvidia has no negative catalyst for the stock. The fundamentals are improving, but the analyst did not predict Nvidia would be able to meet its targets. 

The analyst stated that conditions have been improving in the last months, creating the possibility of future estimations that will be based on higher numbers. According to him, the 50% stock gain over the previous earnings period is difficult to justify an “outperform” rating.

Nvidia shares dropped 1.8% to $298.30. The stock has risen more than 132% since 2021.