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No other stock has caught investors’ attention over the last two years quite like Nvidia (NVDA). As the bellwether of the artificial intelligence (AI) trend, NVDA has risen to astronomical highs. The company has consistently hit new milestones, rising from a market cap of $1 trillion to $3 trillion in just over a year, and briefly outflanking Apple (AAPL) and Microsoft (MSFT) to become the world’s largest company in the process.
While there is a long list of stocks that have created immense wealth for investors, no other company has created so much wealth in absolute terms in such a short time.
While the broader U.S. markets are hitting new highs almost every day, and September continues to defy the historical pessimism associated with the month, NVDA stock is still a ways off from the record highs that it set in June, when its market cap topped $3 trillion.
While Nvidia bounced back smartly from its collapse at the beginning of August, and has reclaimed its $3 trillion market cap, those June highs have been evasive for the stock. Here’s the Q4 forecast for NVDA stock, and a look at the factors that could impact the chip-designing giant’s price action in the final quarter of the year.
Analysts Continue to be Bullish on NVDA Stock
Since May 2023, Nvidia has kept sell-side analysts quite busy, as this group has had to raise their target price on NVDA much more often than they do for a “typical” stock. But then, Nvidia’s price action has been far from typical over the last year, even as we have more recently started to see the return of some normality.
Multiple brokerages raised NVDA’s target price following its fiscal Q2 earnings last month – and many had done so ahead of the report, anticipating the beat – which has become a norm rather than an exception for the Jensen Huang-led company.
Of the 40 analysts covering Nvidia, 35 have rated it as a “Strong Buy,” while 2 say it's a “Moderate Buy.” The remaining 3 analysts rate NVDA as a “Hold” or some equivalent. Nvidia’s mean target price of $149.47 is over 20% higher than Thursday’s close, while the Street-high target price of $200 (via Rosenblatt) is 61% higher.
If Nvidia were to hit its mean target price, it would mean the stock rising to a new record high.
Meanwhile, even as sell-side analysts are quite optimistic about Nvidia and its dominant position in the AI chip ecosystem, at least one section of the market remains a bit skeptical.
Many Hedge Funds Have Cut Their Stakes in Nvidia
During Q2, many hedge funds - including Stanley Druckenmiller's Duquesne Family Office, Steven Cohen’s Point72 Asset Management, David Tepper's Appaloosa Management, and Rajiv Jain’s GQG Partners - trimmed their stakes in Nvidia. While Tepper says he regrets not buying Nvidia again when it dipped in August, he is a bit hesitant about the stock, given the uncertainty around how the company’s earnings could play out in 2026.
Paul Singer’s Elliott Management sold its entire stake in Nvidia and added a new position in Arm Holdings (ARM). Singer – who has built his reputation as an activist investor, and most recently has been in discussions with Starbucks (SBUX) to help revive the coffee company’s business – believes AI is a bubble.
NVDA Stock Q4 Forecast
Nvidia’s Q4 forecast looks positive, as there looks to be no sign that tech majors are turning their backs on AI investments - and if anything, they have increased their capex, a large part of which is going towards buying Nvidia’s chips.
Earlier this month, BlackRock (BLK), Microsoft (MSFT), MGX, and Global Infrastructure Partners announced a Global AI Infrastructure Investment Partnership, which is looking to “make investments in new and expanded data centers to meet growing demand for computing power, as well as energy infrastructure to create new sources of power for these facilities.” As expected, Nvidia will also “support” the venture, which is looking to raise up to $100 billion for its initiatives.
Key Risks That NVDA Investors Should Watch Out For
One risk for Nvidia is that the so-called hyperscalers are also working on their own custom chips, and Amazon (AMZN) recently partnered with Intel (INTC) to develop AI chips. Nvidia’s China business – which is already under pressure due to export control restrictions – could suffer more if the U.S. further clamps down on high-end tech exports to the communist country. Notably, during Donald Trump’s tenure in the White House, trade tensions with China were quite elevated, and while the Biden administration hasn't been soft on the country either, Trump might further raise the heat during a potential second term.
All of that said, given the strong global demand for its chips, I believe Nvidia still has room to run towards its record highs. The possibility of the stock crashing badly in Q4 looks low - and if that happens, I would grab the opportunity with both hands.
On the date of publication, Mohit Oberoi had a position in: NVDA , MSFT , INTC , AMZN , AAPL . All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
