Nvidia’s (NVDA) stock closed lower on Aug. 6, bringing a five-day win streak for the shares to an end.
NVDA stock finished trading down 0.10% at $218.99, snapping a five-day winning streak for the shares and posting its largest percentage decrease since July 29, according to market data. While the decline in Nvidia stock on Aug. 6 was modest in percentage terms, it was one of the most actively traded securities in the S&P 500 index and the second-most actively traded stock in the Nasdaq 100 (NDAQ).
Nvidia’s stock had been on a hot streak in recent days, fueled by strong financial results from technology hyperscalers such as Microsoft (MSFT) and Amazon (AMZN) that are among the best customers for the chipmaker’s artificial intelligence (AI) processors. Nvidia’s stock also got a lift after Elon Musk revealed that SpaceX (SPCX) plans to exclusively use Nvidia’s hardware going forward.
Sovereign AI
Adding to the recent momentum in NVDA stock is the view that Nvidia has a strong position in so-called “sovereign AI,” which refers to AI models and applications that are backed by national governments. To date, 92% of sovereign AI models have been trained on Nvidia chips, according to data from Counterpoint Research.
Nvidia’s revenue from sovereign AI is projected to have more than tripled to $30 billion this year, and the company is counting on more government purchases of its microchips moving forward. The next significant catalyst for NVDA stock will likely be the company’s earnings on Aug. 26. As usual, Wall Street has set a high bar for Nvidia’s quarterly results and expectations among analysts are running high.
Is NVDA Stock a Buy?
Nvidia’s stock has a consensus Strong Buy rating among 37 Wall Street analysts. That rating is based on 36 Buy and one Hold recommendations issued in the past three months. The average NVDA price target of $309.33 implies 60% upside from current levels.
