This AI tool says Nvidia (NVDA) stock is 26% overvalued

March 30, 2023 7:47 AM EDT
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Price: $381.09 -1.41%

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With Nvidia (NASDAQ: NVDA) shares up 85% year-to-date (YTD), Quant Insight's AI tool believes the rally has gone way too far.

Analyst Huw Roberts notes 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 see’s the big funds rebalance their holdings; and sometimes that process can involve selling some exposure to their winners,” Roberts 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,” Roberts 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 analyst concluded.

Nvidia shares are up a further 1% in pre-market after closing at $269.84 yesterday.

By Senad Karaahmetovic

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Senad Karaahmetovic