In the U.S. stock market last Friday, despite the collective rise of the three major indexes, the stock price of Nvidia (NVDA.US) suddenly plunged in late trading. As of the close, the stock price fell by nearly 2%, and the total market value evaporated by US$60.3 billion (approximately RMB) in a single day. 440 billion yuan).

(Source: uSMART)

On the news, last Friday, a rare analyst on Wall Street downgraded Nvidia stock.New Street Research analyst Pierre Ferragu downgraded the artificial intelligence giant's stock rating from "buy" to "neutral" in a report on Friday, believing that the stock's Prices appear to have fully reflected valuations.Ferragu said that after NVIDIA rose nearly 2.4 times last year and 1.54 times this year, the company's value has been fully reflected in the stock price. Unless it is in a bull market, Nvidia's stock currently has only limited room for upside."While Nvidia remains the strongest franchise in the AI ​​data center space, near-term expectations and valuations warrant a more cautious view of the stock," Ferragu wrote in the note.New Street Research's one-year and two-year target prices for Nvidia's stock are set at $135 and $143 respectively. Compared with current levels, this means that Nvidia still has potential upside of 6% and 12% respectively. In the long term, From the looks of it, this number does not seem very attractive to investors.

Despite this, Wall Street analyst Ferragu said that Nvidia's fundamental quality is still intact. Although the rating is downgraded, Nvidia stock will still be bought when it is weak for a long time.In addition, there are currently very few analysts on Wall Street who have a negative view of Nvidia. Prior to this, only Germany's DZ Bank downgraded Nvidia's rating from "buy" to "neutral" in May this year. According to data from TipRanks.com, 38 of 41 analysts recommend buying Nvidia stock, 3 recommend holding, and no one recommends selling.

NVIDIA founder and CEO reduces holdingsThe launch of ChatGPT triggered an upsurge in artificial intelligence (AI) technology. NVIDIA provides powerful parallel computing capabilities, which is crucial for training large-scale deep learning models such as GPT, and is therefore highly sought after by funds. But Nvidia's stock price has fallen back in recent weeks as some investors, including Nvidia founder and CEO Jensen Huang, choose to lock in profits.

(Source: uSMART)

According to documents disclosed by the U.S. Securities and Exchange Commission on Friday, Huang Renxun sold 240,000 shares of Nvidia common stock on July 2 and 3 at an average price of $123.2567 per share, worth approximately $29.5816 million. Huang Renxun's stock sale plan was announced as early as March this year. At that time, Nvidia mentioned in its quarterly financial report that Huang Renxun would sell up to 600,000 shares through a 10b5-1 stock sale plan before the end of March 2025. Market analysts pointed out that the shares sold by Huang Jen-Hsun are part of his executive compensation package, including restricted stock units (RSU) and performance stock units (PSU), which is a common practice for corporate CEOs when they comply with regulations.

Nvidia could face regulatory stormNvidia is facing regulatory pressure in the European market.European Commission Competition Commissioner Margrethe Vestager warned that there is a "huge bottleneck" in Nvidia's AI chip supply and that EU regulators are considering whether to take action. Vestager mentioned during his visit to Singapore that the supply of AI chips is tight and the secondary market may help promote innovation and fair competition, but leading companies may face behavioral restrictions.At the same time, French regulators plan to file an antitrust lawsuit against Nvidia, accusing it of exploiting its market dominance and expressing concerns about the AI ​​industry's reliance on CUDA programming tools. Companies that violate antitrust laws could face fines of 10% of global annual turnover. Last year, French Economy Minister Bruno Le Maire said that Nvidia’s dominance in the AI ​​chip market had exacerbated international inequality and inhibited market competition. Data showed that Nvidia occupied 92% of the GPU market share.The European Commission is also informally gathering opinions to determine whether Nvidia violated EU antitrust rules, but has not yet launched a formal investigation. Analysts believe that the EU’s antitrust measures reflect concerns about the dominance of U.S. technology giants in new technology fields. European companies' growth lags behind that of the United States due to less investment and R&D funding.