Should You Buy Nvidia (NVDA) Stock Before June 26?


  • Nvidia (NVDA) stock is popping on Friday, likely due to ETF rebalancing dynamics.
  • Today’s upswing adds a wrinkle to the narrative ahead of the firm’s shareholder meeting.
  • NVDA stock has forward potential but also some valuation concerns.
NVDA stock - Should You Buy Nvidia (NVDA) Stock Before June 26?

Source: Michael Vi /

Tech stalwart Nvidia (NASDAQ:NVDA) is showing no signs of slowing down, with NVDA stock gaining conspicuously against a down day in the market on Friday. A rebalancing at a benchmark exchange-traded fund (ETF) is likely sparking the latest bullish move in shares. However, today’s upswing also adds a wrinkle to the decision-making process of whether to buy NVDA stock ahead of the company’s annual shareholder meeting.

On June 26, Nvidia will host its annual meeting online at 9:00 a.m. Pacific Time and discuss some important administrative matters. What stakeholders of NVDA stock may be looking forward to most, however, is the framing of the business. Ahead of the disclosure, Nvidia provided its annual review document, detailing some of its core attributes and strategic vision.

One area that could draw significant attention is the integration of artificial intelligence (AI) in critical industries. For example, the latest annual review from Nvidia referenced a Forbes article which cited the potential for AI to transform healthcare.

According to Precedence Research, the AI in healthcare sector reached a valuation of $15.1 billion in 2022. By 2032, the industry could expand to $355.78 billion, implying a compound annual growth rate (CAGR) of 37.66%.

NVDA Stock Pops, But Concerns Linger

As of this writing, NVDA stock is up almost 2%. This surge may stem from the recent rebalancing of the Technology Select Sector SPDR Fund (NYSEARCA:XLK). According to CNBC, the XLK fund bases its rebalancing protocol on market capitalization values. With Nvidia, more weighting to the tech juggernaut may boost the share price.

That’s exactly what appears to be happening. With the latest move, NVDA stock is now up more than 9% for the trailing five sessions. However, this continued lift in price also raises the stakes when it comes to acquiring NVDA stock ahead of the June 26 meeting.

At the moment, data from Gurufocus shows that NVDA stock trades at a forward earnings multiple of 50.6 times. Further, the market prices the security at 41.1 times trailing-year revenue. Both of these stats are well above the norm for the semiconductor industry, although the central bullish argument is that NVDA deserves the premium because of its tremendous relevancies.

Indeed, the analyst assessment doesn’t make the situation any better. Right now, the consensus view of NVDA stock is unsurprisingly a strong buy. However, the average price target for shares sits at $126.32, implying more than 4% downside risk.

Therefore, investors must weigh the forward potential of NVDA stock against correction risks. With the aforementioned rebalancing ahead of a key date, it’s not an enviable decision to make.

On the date of publication, Josh Enomoto did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.

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