By Senad Karaahmetovic
With Nvidia (NASDAQ:NVDA) shares up 85% year-to-date (YTD), Quant Insight’s AI tool believes the rally has gone way too far.
Quant Insight’s analysts note that Nvidia stock has benefited from the next-generation AI deployment as well as from the rotation into tech stocks as safe haven plays.
“Clearly the semiconductor company has a great story and it is no surprise it’s popular with retail investors. It is, however, a reminder that quarter end often sees the big funds rebalance their holdings; and sometimes that process can involve selling some exposure to their winners,” they wrote in a report.
Quant Insights’ eyeQ tool, an AI-driven analytical tool that analyses millions of data points in real time, suggests that Nvidia stock rally has gone “further than macro fundamentals suggest.”
“The result is a 26% rich valuation gap on Qi’s machine,” the analysts added.
This suggests Nvidia shares should trade at around $215 apiece.
It remains to be seen how Nvidia stock will react given that “so much good news seemingly already in the price,” the analysts concluded.
Nvidia shares are up a further 1% in premarket after closing at $269.84 yesterday.