Nvidia (NVDA) Stock: Wall Street Loves It, But the Chart Tells a Different Story

TLDR

• Nvidia’s market cap sits at $4.71 trillion, up just 4.5% this year, while Apple has surged 14% to close the gap at $4.51 trillion
• NVDA opened at $194.83 on Friday, down 1.4%, trading below its 50-day moving average of $210.37
• Nvidia plans to return 50% of free cash flow to shareholders via buybacks and dividends, backed by an $80 billion repurchase authorization
• Institutional ownership stands at 65.27%, with multiple funds adding to positions, but two directors sold over $189 million in stock in June
• Wall Street consensus remains Buy with an average price target of $303.84, with Goldman Sachs setting a $285 target

Nvidia (NVDA) stock opened at $194.83 on Friday, down 1.4%, as the world’s most valuable company by market cap faces a closing challenge from Apple.

NVIDIA Corporation, NVDA

Apple has climbed 14% year-to-date to a market value of $4.51 trillion. Nvidia, by contrast, is up just 4.5% over the same period, sitting at $4.71 trillion. That gap is narrowing fast.

Nvidia has held the top spot for 258 consecutive days after reclaiming it from Microsoft in late June 2024. It’s the seventh-longest run this century, but Apple has previously held the crown for stretches as long as 1,344 days.

The question now is whether Nvidia can build the kind of durability Apple has shown. And to do that, it may need to borrow a few pages from Apple’s playbook.

Apple’s formula — hardware and software locked tightly together, massive buybacks, and a loyal customer base that doesn’t stray — has kept it near the top for years. Nvidia is working on each of those fronts, but with varying degrees of progress.

Shareholder Returns and Buybacks

On capital returns, Nvidia is moving in the right direction but isn’t there yet. Apple returns nearly all of its free cash flow to shareholders. Nvidia plans to return 50%, through dividends and buybacks, with intentions to increase that over time.

The $80 billion buyback authorization announced in May is a clear signal of intent. The company also raised its quarterly dividend to $0.25 per share, up sharply from the prior $0.01 — a $1.00 annualized dividend at a 0.5% yield.

In its most recent quarter, Nvidia beat earnings estimates with $1.87 EPS versus the $1.76 consensus. Revenue hit $81.61 billion, up 85.2% year over year, and well above the $78.42 billion analyst estimate.

CUDA Moat and Competitive Pressure

Nvidia’s CUDA software has long been the glue that keeps customers on its hardware. It worked well during the training phase of AI development. The test now is whether that moat holds during inference — the process of running AI models in production.

Rivals like Cerebras Systems are claiming their chips outperform Nvidia on inference speed. Meanwhile, Alphabet and Amazon are developing their own custom chips, even while continuing to buy Nvidia hardware at scale.

That tension — biggest customers also being potential competitors — is the central risk hanging over the stock.

On the institutional side, the picture is broadly supportive. Generali Investments raised its NVDA stake by 8.6% in Q1 to 59,500 shares worth $10.4 million, making it their second-largest position. Brighton Jones added 12.4% to its holding. Hudson Value Partners lifted its position by 30.7%.

But two directors sold heavily in June. Stephen C. Neal offloaded 15,500 shares at $215.73. Mark A. Stevens sold 885,000 shares at $210.17 for just over $186 million. Insiders have sold $410.6 million in stock in the last quarter.

Nvidia’s 52-week range sits between $157.34 and $236.54. The stock is currently trading below its 50-day moving average of $210.37, though above its 200-day moving average of $193.50.

Analyst consensus stays firmly at Buy, with an average price target of $303.84. Goldman Sachs holds a $285 target, while Rothschild & Co Redburn recently raised theirs to $300.

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