Nvidia's stock price fell along with the broader chip sector on June 8, dropping more than 6% in a single day to close at approximately $205. Foreign media commentators suggested that this correction reflects a concentrated adjustment following excessive gains in AI concept stocks, rather than a sudden weakening of the company's fundamentals.
The sell-off spread from the chip sector.
The decline began when Broadcom's quarterly results failed to meet high market expectations. Following the announcement, the semiconductor sector quickly came under pressure, with stocks like Nvidia, AMD, and Micron all falling. Previously, most of these companies' stock prices were already at high levels, and their valuations had been steadily increasing.
The article mentions that the market is simultaneously digesting two pressures: first, investor concerns about an overheated AI sector; and second, valuation compression due to potential increases in US interest rates. AI concept stocks in the South Korean stock market have also declined, indicating that this round of selling is not limited to the US market.
Jensen Huang says AI development is still in its early stages.
Foreign media reported that Nvidia CEO Jensen Huang, while attending a collaboration launch event with SK Hynix in Seoul that day, was asked about recent stock price fluctuations. He stated that market declines mean investors can buy at lower prices, and noted that AI infrastructure development is still in its very early stages.
According to the article, Huang Renxun's core judgment remains unchanged: the global expansion of AI infrastructure is far from over. Nvidia's collaboration with SK Hynix on advanced AI memory chips is also seen as a significant signal that the company continues to bet on the next round of computing power upgrades.
Wall Street's target price is still higher than the current price.
The article cites the average target price of 62 Wall Street analysts, stating that Nvidia's target price is approximately $298, about 45% higher than the current price mentioned in the article. Among them, Needham reiterated its "buy" rating on June 2nd with a target price of $270; China Renaissance subsequently also gave a "buy" rating and a target price of $319.
Foreign media also noted that, judging from the forward price-to-earnings ratio, Nvidia's valuation is not significantly higher than some of its peers. The article stated that Nvidia's current forward price-to-earnings ratio is about half that of Broadcom and one-third that of AMD, while the company still controls the majority of its AI computing revenue.
Market focus on new architecture and capital expenditure
The article argues that another factor supporting the bullish outlook is Nvidia's expected launch of the Rubin architecture later this year. According to the article, this generation of products is expected to have significantly lower inference costs than its predecessor, potentially driving the next upgrade cycle.
Furthermore, Nvidia projects that global annual capital expenditure on data centers will reach $3 trillion to $4 trillion by 2030, with large AI cloud service providers potentially spending $1 trillion by 2027 alone. Foreign media outlets believe that the short-term stock price correction has not changed the market's assessment of the long-term expansion of AI infrastructure.
