Please ensure Javascript is enabled for purposes of website accessibility

Why Nvidia Stock Is Falling Today

By Chris Neiger – Aug 16, 2021 at 12:39PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

An analyst's comments sent the stock tumbling.

What happened

Shares of Nvidia (NVDA 4.94%) were sliding this morning after Credit Suisse analyst John Pitzer reiterated his outperform rating for Nvidia's stock and said that he's concerned about near-term volatility from the stock because of a slowdown in the cryptocurrency market.

The tech stock was down by as much as 3.6% today and was down by 2.4% as of 11:45 a.m. EDT. 

So what 

Investors weren't happy to hear that Pitzer thinks that a slowdown in crypto could affect Nvidia in the short term. But it's worth pointing out that Pitzer is bullish on Nvidia over the long term because of the company's AI enterprise and its automotive opportunities. 

A person holding a microchip.

Image source: Getty Images.

But Pitzer's price target of $175 for Nvidia's stock is below the company's current price of about $195, and his concern over the crypto market has been a recent focus of many tech investors.  

The crypto market has experienced some volatility over the past few months as the Chinese government has cracked down on Bitcoin miners in the country. Some U.S. lawmakers have also indicated that cryptocurrencies should be more regulated.

The focus of both governments on crypto has put pressure on cryptocurrencies over the past few months and has helped push the price of Bitcoin to about $47,000 -- down from nearly $65,000 back in April.  

Nvidia investors are watching the cryptocurrency market closely because the company's graphics processing chips are used in high-powered crypto-mining computers. 

Now what 

Long-term Nvidia investors may want to be cautious about using Pitzer's recent investor note as a guide for changing their investing thesis. Nvidia is still a leader in the graphics processor market and continues to benefit from increased demand for AI-powered servers. 

The cryptocurrency market is likely to remain very volatile, but Nvidia isn't dependent on cryptocurrency mining to be successful. The company's data center and gaming segments are its most important businesses, and nothing has fundamentally changed about them. 

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Bitcoin and Nvidia. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Nvidia Stock Quote
$164.07 (4.94%) $7.72

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.