Nvidia (NVDA) Stock Slips on Wells Fargo Downgrade
NEW YORK (TheStreet) -- NVIDIA (NVDA) - Get Report stock was downgraded to "underperform" from "market perform" at Wells Fargo Friday morning.
The firm lauded the San Francisco-based banking and financial services company for doing an "excellent job" creating value in the past two years by expanding its central gaming graphics processor unit business, in addition to its expansion into other applications, Barron's reports.
Still, renewed competition from Intel (INTC) in coprocessors and Advanced Micro Devices (AMD) in graphics could stunt NVIDIA's growth and make it difficult for the company to exceed expectations in the near future.
"We expect that NVIDIA will be able to continue to grow its coprocessor business in the future but we wonder if rising competition from Intel in this segment creates from headwind to momentum in the space," Wells Fargo said in analysts note.
The firm added that the stock is trading "well above" its $30 to $36 valuation range.
Shares of NVIDIA are slipping 1.44% to $52.55 this morning.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate NVIDIA CORP as a Buy with a ratings score of A. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, expanding profit margins and good cash flow from operations. We feel its strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.
You can view the full analysis from the report here: NVDA
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